China Is Running Circles Around American Solar Panel Makers Despite Biden Admin Subsidies And Tariffs

Chinese companies are dominating U.S. solar production despite tariffs and subsidies from the Biden Administration, according to a recent investigation from Reuters.

China-backed manufacturers, armed with low-cost government financing and subsidized raw polysilicon from the Chinese government, are outcompeting American solar companies on their own soil. A minimum of 20 gigawatts’ worth of annual solar panel production – enough to supply half the American market – will come from Chinese manufacturers operating in the United States within the next year, according to Reuters.

The findings reveal challenges the Biden administration faces in preventing an over-reliance on China as it pursues its goal of 100% clean electricity by 2035.

“They [the Chinese] have a lot more experience building factories and setting up supply chains,” said David Feldman, a solar market researcher with the U.S. Department of Energy’s National Renewable Energy Laboratory.

Paula Mints, founder of solar industry research firm SPV Market Research, shared Feldman’s concern about the ability of U.S. manufacturers to quickly scale panel production.

“You have a stacked deck here. It’s hard to imagine that anyone, particularly a greenfield manufacturer, can do it as quickly as a Chinese manufacturer,” she told Reuters.

China’s superiority in solar manufacturing combined with its government’s heavy subsidization of input materials like raw polysilicon and unfinished solar modules makes it difficult for U.S. companies to compete, despite U.S. tariffs, Inflation Reduction Act (IRA) subsides and restrictions on Chinese products tied to forced labor. As a result, U.S.-owned solar businesses have begun seeking additional tariffs on solar imports, according to Reuters.

“We’re just asking for legitimate U.S. manufacturers to have a chance to compete with these gigantic Chinese-owned companies,” said Tim Brightbill, attorney for the American Alliance for Solar Manufacturing Trade Committee.

Even if the Biden administration grants these additional tariffs, they are unlikely to affect the U.S. solar market anytime soon due to a glut of low-cost Chinese solar panels imported into the U.S. during a Biden-forced moratorium on solar tariffs in 2022 and 2023. The surge in solar panel imports during the “tariff holiday” – a record amount of solar capacity entered the U.S. in 2023 – caused panel prices to fall 50%, according to S&P Global, the New York Times, and Reuters.

This has left US-owned businesses unable to compete, according to Hari Achuthan, the CEO of US-based solar manufacturer Convalt.

“If we are to succeed, we need American manufacturers like Convalt to survive this onslaught of low prices, to build factories with capacities that allow us to compete against the largest global firms, with Chinese beneficial ownership.”

The IRA authorized $370 billion to combat climate change. While originally focused on supporting US-owned solar manufacturers, the IRA left ample loopholes for Chinese solar companies to benefit. This is exemplified by Illuminate USA – a joint partnership between Chicago-based green energy investor Invenergy and China’s largest solar company LONGi – which is slated to receive $350 million each year in federal subsidies via the IRA.

Altogether, Chinese-owned businesses could reap $1.4 billion worth of subsidies from the IRA each year via joint partnerships with American businesses like Illuminate USA.

The White House did not immediately respond to a request for comment.

Republished with permission from The Daily Caller News Foundation.