The Biden administration touts solar energy as one of its big success stories, a booming new industry that is curbing the effects of the climate crisis and creating high-paying jobs across the country. But the more complicated truth is that the United States is mired in a long-running trade war with China, which is flooding the market with artificially cheap solar panels that carry an uncomfortably large carbon footprint and threaten to obliterate the domestic industry.
The price of solar panels has plummeted 50% over the past year, largely, industry insiders say, because of deliberate Chinese overproduction of key components and a game of international cat-and-mouse over trade rules often likened to a game of “whack-a-mole”. As different sets of rules get established, Chinese companies have proved adept at moving their manufacturing plants to other countries, in south-east Asia, and shifting strategies to work around US tariffs and other deterrent measures.
The fear, shared by a number of US solar panel manufacturers who have managed to survive a turbulent market over the past few years, is that the boom in renewable energy being touted in Washington might in fact be helping China to strong-arm its way to a global monopoly (it already manufactures more than 80% of the world’s solar panels).
“China has dominated the solar manufacturing sector for a decade … using a familiar playbook to those of us who’ve watched what the OPEC cartel has done to oil markets,” Mike Carr, executive director of the Solar Energy Manufacturers for America coalition, wrote recently. “OPEC has demonstrated again and again that you can either join them or be run over … Now China is doing the same thing in solar to stifle our manufacturing renaissance before it gets a chance to take off.”
If this threat has not been touted more widely, it is in part because the rock-bottom prices are highly attractive to wealthy investors and installation companies interested in slapping as many solar panels on houses and businesses as possible, no matter the source. Indeed, the largest industry lobby group in the United States, the Solar Energy Industries Association (SEIA), has argued that policing China more rigorously could strangle growth and put jobs at risk – a claim not always backed up by the numbers – and risk compromising the Biden administration’s climate goals.
At events such as this week’s industry conference in Las Vegas, RE+, the focus is often on the race to reduce dependence on fossil fuels, and the administration’s aim to reach 100% carbon pollution-free electricity by 2035, more than the smartest strategies for getting there.
US manufacturers and trade experts share many of the same goals but take a dramatically different approach, arguing that the boom and the low prices fueling it are only temporary and that bowing to Chinese interests is no solution. In the words of Tim Brightbill, a lawyer representing several US manufacturers in a formal trade complaint, if Chinese manufacturers succeed in taking over the US market and force domestic manufacturers into liquidation, it won’t be long before they “jack up prices without fear of competition”.
The chief executive of one of Brightbill’s client companies, First Solar, echoed this warning in testimony to Congress in March, pointing to the many US solar companies that have gone out of business over the past two decades because they were priced out of the market. “The relentlessness of the Chinese subsidization and dumping strategy,” chief executive Mark Widmar said, “threatens the viability of many manufacturers who may never be able to get off the ground or have the ability to finance the start up or growth of their operations.”
Last month, the Swiss company Meyer Burger abandoned plans, announced more than a year ago, to set up a solar cell production plant in Colorado, saying it was “no longer financially viable”.
There are questions, too, about how beneficial solar panels with Chinese-made components are to the environment. “Consumers need to understand that when they buy solar panels from China, these are being made using coal-fired power plants. And they are being sent here on super-container vessels run on diesel fuel. It’s a highly inefficient and polluting way of manufacturing renewable energy,” Brightbill said.
“Chinese companies don’t have any comparative advantage, only artificial advantages. They rely on government subsidies, and on lack of enforcement of labor and environmental laws.”
The international trade battle has been partly obscured by the rhetoric on the US presidential campaign trail, where Democrats led by Kamala Harris generally tout the benefits of renewable energy and the Republican ticket, Donald Trump and JD Vance, denounce what they call the “green new scam”.
The reality, though, is that both the Trump administration in 2017-2021 and the Biden administration struggled to curb Chinese influence over the US solar market and were influenced by an energetic multi-million dollar lobbying and public relations campaign to keep the cheap Chinese imports coming.
In 2019, the Trump White House agreed to exclude a new technology – two-sided or bifacial solar panels – from tariffs being imposed on China, only to regret it a year later because the technology quickly became dominant in the industry. The administration attempted to revoke the exception it had crafted, only to become locked in a legal battle with SEIA in the court of international trade and lose.
In 2022, the Biden administration came under a barrage of lobbying efforts by SEIA and and others and agreed – without sitting down with representatives of the US solar panel manufacturing sector – to waive duties on solar component imports from Asia for two years. According to a US government investigation that began at the time and concluded in 2023, China was using offshore manufacturing plants in Malaysia, Vietnam, Cambodia and Thailand to circumvent trade rules designed to prevent dumping and unfair competition, and the duties were intended to counter that circumvention.
“Once this [lobbying] campaign started ramping up, we started getting a lot of incoming, in a very pointed way, about how the commerce department … was single-handedly going to torpedo the president’s climate agenda,” a former senior Biden administration official said, referring to the agency responsible for considering the tariff moratorium.
“The campaign was very effective in terms of shaping the discussion before a lot of people actually had the opportunity to understand both the facts of the complaint and … the process that was under way,” the former official said.
Given the chance, US manufacturers say they would have argued that previous SEIA forecasts of huge job losses and a slump in solar installations as a result of tariffs on Chinese imports had proved inaccurate. (In fact, the industry expanded after a previous round of tariffs imposed in 2018.) SEIA’s dire warnings in years past appear to have cost it some credibility among policymakers and advocates in and out of the White House, experts said.
Asked to comment, SEIA did not directly refute these criticisms, suggesting only that they distorted what it described as a 50-year record of supporting domestic manufacturers and helping to craft federal clean energy policies. “If you’re going to Monday morning quarterback, let’s compare apples to apples,” spokesperson Stephanie Bosh said in a statement. “We will continue to advocate for policies needed to continue the build-out of solar and storage manufacturing here in the United States.”
The administration, together with Congress, has now lifted the moratorium on duties, removed the tariff exemption for bifacial panels, doubled tariffs on solar panel components imported directly from China, encouraged further investigation of unfair Chinese trading practices, and proposed cracking down on a domestic tax exemption that is inadvertently benefiting Chinese manufacturers operating on US soil.
New restrictions on China and its satellites in south-east Asia circumventing international trade rules are expected to be imposed over the next few months, and domestic manufacturers hope this will make it easier to take advantage of tax and other incentives included in Joe Biden’s signature climate bill, the 2022 Inflation Reduction Act.
SEIA and its allies are continuing to lobby against many of these moves, arguing once again that they risk slamming the brakes on a booming industry. US manufacturers, however, see an opportunity to establish themselves more solidly and make cleaner, greener, higher quality panels that have their own appeal to consumers.
“We strongly believe you can have solar deployment continuing to increase and fight climate change while at the same time having a strong domestic manufacturing industry,” Brightbill said. “All we’re asking for is a chance to compete against these giant Chinese companies that have come to dominate the market in the last decade.”