The U.S. solar industry has a complicated relationship with China. The silicon solar cell may have been invented<\/a> in America 70 years ago, but manufacturing dominance has since shifted to China and Southeast Asia. Manufacturing tax credits included in the Inflation Reduction Act of 2022 accomplished the goal of reinvigorating domestic solar manufacturing<\/a> across the country, but most of the new stateside factories opening their doors have Chinese ties. More solar panels are being made in America than ever, but it\u2019s undetermined whether they\u2019re truly American and if anyone can do anything about it.<\/p>\n According to Solar Power World<\/em> records<\/a>, of the U.S. solar panel factories that have opened specifically due to IRA credits, 60% have obvious Chinese investors. These include companies like Canadian Solar \u2014 which, despite its name, largely does business in China \u2014 and LONGi. Both companies now operate the largest single-site silicon panel assembly operations in the United States \u2014 5 GW for Canadian Solar in Texas and 5 GW for LONGi in Ohio (although through new entity Illuminate USA).<\/p>\n Workers at the Illuminate USA manufacturing facility in Ohio celebrate production of 1 million solar panels, supported by LONGi.<\/p><\/div>\n Both Canadian Solar and LONGi are boosting domestic solar manufacturing and employing hundreds of American workers \u2014 but should they receive tax credits for their efforts? Some U.S. legislators and solar manufacturers say absolutely not.<\/p>\n The U.S. Senate has been vocal about outside forces affecting domestic solar manufacturing. Sens. Sherrod Brown of Ohio and Jon Ossoff of Georgia introduced legislation and requested Dept. of the Treasury assistance in \u201cdisrupting\u201d China\u2019s dominance on the solar supply chain. Their appeals mirror those made by First Solar and Qcells in various tariff investigations shaping the U.S. solar industry \u2014 two companies with major manufacturing footprints in both Brown and Ossoff\u2019s represented states.<\/p>\n In July, the two senators introduced<\/a> the American Tax Dollars for American Solar Manufacturing Act to prevent taxpayer money, including funds from the IRA, from going to Chinese-controlled companies. The legislation would ensure that only American manufacturers with a \u201cgenuine domestic supply chain\u201d benefit from tax credits and prevent any company with ties to a \u201cforeign entity of concern\u201d from receiving the 45X Advanced Manufacturing Tax Credit, which provides incentives to those making solar components in the United States.<\/p>\n \u201cWe cannot allow American tax dollars to go to Chinese companies that cheat and undermine American solar manufacturing. Our bipartisan bill will make sure that only American companies are supported by taxpayer dollars and support the creation of manufacturing jobs throughout the solar supply chain across Ohio,\u201d\u00a0said Sen. Brown when the legislation was announced.\u00a0\u201cWe will not allow the Chinese government to take down the American solar manufacturing industry.\u201d<\/p>\n Production lines at one of First Solar’s manufacturing facilities in Ohio.<\/p><\/div>\n The issue with the bill\u2019s language is that no one has a genuine domestic supply chain \u2014 which the senators previously argued<\/a> should begin at the wafer stage \u2014 except, of course, First Solar (which manufactures thin-film modules) and Qcells (which will be the only silicon solar manufacturer in the United States to have its own domestic wafer supply). Also, any Chinese solar brand manufacturing in the United States already cannot access tax credits unless working through a U.S. company. Canadian Solar is leaning on its long-established U.S. subsidiary for its panel operations in Texas, and LONGi \u2014 which is manufacturing in Sen. Brown\u2019s state of Ohio \u2014 has invested in Illuminate USA along with U.S. developer Invenergy.<\/p>\n Keith Martin, partner at law firm Norton Rose Fulbright<\/a>, said this bill could never work as written.<\/p>\n \u201cThe most recent bill is not properly drafted. It denies 45X credits for components \u2018produced by a foreign entity of concern.\u2019 Companies claiming 45X credits are U.S. companies,\u201d he said.<\/p>\n A different piece of legislation, the Protecting Advanced American Manufacturing Act introduced<\/a> by Florida Sen. Marco Rubio in 2023, has more ambiguous language that could gain a foothold. This bill, also introduced in the House by West Virginia Rep. Carol Miller, would deny tax credits to companies that are incorporated or headquartered in China or that are directly or indirectly owned, controlled, directed or materially influenced by the Chinese government.<\/p>\n \u201cThis bill would deny any disqualified entity the ability to claim these tax credits,\u201d Martin said. \u201cIt\u2019s such a broad statement that it\u2019s a little hard to know exactly what would be ruled out.\u201d<\/p>\n Bills like these must be included in a larger tax bill to pass. No tax legislation has advanced in 2024 for these solar-manufacturing-specific items to make any real progress.<\/p>\n Even removing China from the discussion, it\u2019s difficult to find a purely American solar manufacturing company in this maturing industry. Qcells has Korean backing, Silfab and Heliene are from Canada, Elin Energy\/Sirius PV originated in Turkey and Meyer Burger is Swiss. First Solar may be the most \u201cAmerican,\u201d but that is thanks to it starting in Ohio at the dawn of solar panel technology advancements.<\/p>\n A fresh batch of American solar companies could emerge if the United States wins the race to commercialize perovskites, but for the time being, the domestic solar manufacturing industry is run by multinational companies.<\/p>\n To prevent one country from participating in domestic manufacturing and gaining IRA credits is a complex political issue that starts to look like a trade war, said Eli Hinckley, partner with Baker Botts<\/a>.<\/p>\nChinese firms set up manufacturing in the United States <\/strong><\/h3>\n
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<\/a>Preventing outside influence on American solar products<\/strong><\/h3>\n
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