Chinese firms setting up solar plants in US
4 factories to open soon as demand for panels sees shift in global supply chain
Several of China’s largest solar power companies are building factories in the United States, aiming to serve the growing US solar market.
At least four new factories backed by Chinese manufacturers will open this year. Most, if not all, have previously done the bulk of their manufacturing in Asia.
Once the factories are completed, the companies will have enough capacity to supply more than half of the 33 gigawatts of panels that were installed throughout the US last year.
Longi Green Energy Technology, based in Xi’an, the capital of Shaanxi province, is one of the companies building a factory in Ohio in conjunction with Chicago-based Invenergy, a developer of renewables. The production of panels is expected to begin by March.
Trina Solar, another Chineseowned company, announced in September that it will spend $200 million to build a factory in Wilmer, Texas. It will start operations by the summer.
“We have long had a vision to manufacture solar products in the US, and we are proud of the jobs we are creating and the investment we are making in the Wilmer community,” Steven Zhu, president of Trina Solar US, said in a statement.
“Trina’s goal in building this facility is to begin to create an ecosystem of American manufacturing that can serve the burgeoning US solar market.”
China has quickly become a leader in solar panels, producing more than 80 percent of all panels sold worldwide. China also makes solar panels 44 percent cheaper than the US does.
In China, at least 12 percent of the country’s electricity generation capacity comes from solar, according to the US Energy Information Administration, an agency of the US Federal Statistical System responsible for collecting, analyzing and disseminating energy information.
The figure for the US is 3.4 percent, it said.
The technology was first developed in the US in the 1950s. But in recent years, the US industry has stalled and now reportedly has less than half the solar capacity of China.
Much more spending
Data show that the reason is that China has spent nearly 10 times as much on solar manufacturing than the US and the European Union combined over the past few years.
Meanwhile, the US is the leader in producing silica sand, which is crucial in the process of solar power generation. The country exports $470 million worth of silica sand each year, according to the Observatory of Economic Complexity, an online data distribution platform.
China is the largest importer of silica sand. Other large exporters of the mineral include Australia and Indonesia.
Daniel Kirschen, a professor of electrical and computer engineering at the University of Washington in Seattle, said: “Solar energy is a very important part of achieving a carbon-free future. Wind energy and solar energy are the most effective renewable energy sources.”
The administration of US President Joe Biden has set ambitious targets for producing clean energy.
One option is for companies to use subsidies under the Inflation Reduction Act that reward solar manufacturers with incentives for panel installations and tax credits for manufacturing solar components in the US.
Several US politicians want the incentives to be available only to domestic companies. However, the country is heavily reliant on China’s supply chain and expertise because it produces relatively few of the components needed for solar panel production.
First Solar, a US company, invested $1.2 billion in local plants to boost its domestic manufacturing by 75 percent.
Biden championed the Inflation Reduction Act as a way to rebuild the US solar supply chain. The law provides an estimated $300 billion worth of subsidies over the next decade to stimulate the low-carbon transition and the onshore manufacturing of renewable energy.
Kirschen said there is no doubt that solar will be an important part of future energy supplies for countries worldwide.
But there will “obviously be geographical differences (in how it can be used) because not every part of the world, or even each country, gets the same amount of solar irradiance”, he said.