The construction of solar manufacturing plants in the U.S. by Chinese companies is rapidly increasing, positioning China to dominate the emerging industry.
Chinese solar panel makers aim to utilize clean energy manufacturing subsidies contained in President Joe Biden’s 2022 Inflation Reduction Act.
Despite federal subsidies, American factories struggle to compete. Chinese firms will have at least 20 gigawatts of annual solar panel production capacity in the U.S. within the next year, enough to meet about half of the U.S. market demand, Reuters news report said.
Chinese companies, including Jinko Solar, Trina Solar, JA Solar, Longi, Hounen, Runergy, and Boviet, are leading this surge.
The rapid increase in U.S. solar panel production by Chinese-owned companies poses a challenge to President Joe Biden’s climate agenda. While the administration seeks new investments to create U.S. jobs in clean energy, it aims to avoid over-reliance on China during the transition from oil and gas to renewables.
Chinese companies investing in U.S. solar equipment factories
ILLUMINATE USA
Illuminate, a joint venture between Chinese solar equipment maker Longi and U.S. clean energy project developer Invenergy, started producing solar panels at a five-gigawatt plant in Pataskala, Ohio in February. It aims to 1,000 workers at full capacity by the end of 2024. Illuminate said it is investing $600 million.
TRINA SOLAR
Trina Solar is investing $200 million on a five-GW solar module plant in Wilmer, Texas that to start production this year. Trina Solar’s factory will create 1,500 jobs. Trina, which has been supplying panels to the U.S. market for nearly two decades, is also in the final stages of selecting a location for a five-GW U.S. cell factory that would supply its Texas plant.
JINKO SOLAR
Jinko Solar has opened a 400-megawatt panel factory in Jacksonville, Florida in 2018. The company aims to spend $52 million to triple its current capacity and create an additional 250 jobs by the end of 2026. Jinko executives said the plant would employ 600 people.
JA SOLAR
JA Solar is spending $60 million on a two-GW panel plant in Phoenix, Arizona. The factory is expected to create more than 600 jobs and start production this year.
RUNERGY
Runergy is setting up a five-GW solar module plant in Huntsville, Alabama in a factory. Runergy’s factory will create 800 jobs and will begin shipping products to customers this summer. Runergy is considering additional manufacturing investments in the United States that would add an additional 1,500 jobs.
BOVIET SOLAR
Boviet will invest $294 million in solar cell and module factories in Greenville, North Carolina. The two-GW module plant is expected to start production in the first quarter of 2025. Boviet plans to build a new factory to produce two GW of cells that will start production in 2026. The investments are expected to create 908 jobs.
HOUNEN SOLAR
Hounen Solar is investing $33 million in a one-GW factory in Orangeburg, South Carolina that will create 200 jobs.
Chinese firms benefit from subsidized supply chains for raw polysilicon and unfinished solar modules, low-cost government financing, and U.S. subsidies for clean energy manufacturing under the 2022 Inflation Reduction Act. This advantage makes it difficult for non-Chinese competitors to match the pace and scale of Chinese manufacturers.
Experts like Paula Mints of SPV Market Research and David Feldman from the U.S. Department of Energy’s National Renewable Energy Laboratory acknowledge the Chinese investment’s role in maturing the domestic solar manufacturing industry while creating jobs. Local and state officials in Texas, Arizona, Ohio, and North Carolina have welcomed these investments.
U.S. manufacturers face challenges
U.S. manufacturers face significant challenges. Companies like Convalt are struggling to compete against low-priced imports and China’s dominant presence. Convalt’s CEO Hari Achuthan highlighted the need for American manufacturers to survive this onslaught to build competitive capacities. The Department of Energy recognizes the reliance on foreign expertise for developing a domestic solar supply chain.
Chinese companies account for one-fifth of the announced solar factories since the U.S. adopted new climate subsidies. Efforts to ease U.S. dependence on Chinese solar products include tariffs and bans on goods linked to China’s Xinjiang region due to forced labor concerns. The U.S. is also considering new duties on components made in other Asian countries where Chinese manufacturers have set up.
Chinese companies investing in the U.S. focus primarily on module production, assembling solar cells imported from Asia into panels.
The American Clean Power Association notes that the U.S. solar-manufacturing sector is attracting global and domestic investment, with U.S.-headquartered companies leading in panel production. However, top U.S. producers Hanwha Qcells and First Solar are advocating for new tariffs on component imports from countries where Chinese rivals have established factories.