Hopes of domestic boom clouded

Surge of cheap exports from China upending U. S. clean energy sector

WASHINGTON » L ess than a year ago, Cubicpv, which manufactures components for solar panels, a nnounced t hat it h ad secured more than $ 100 million in financing to build a $ 1.4 billion factory in the United States. The company planned to produce silicon wafers, a critical part of the technology that allows solar panels to turn sunlight into electrical energy.

The Massachusetts- based company called the investment a “direct result of t he long- term industrial policy contained within the Inflation Reduction Act,” the 2022 law that directed billions of dollars to develop America’s domestic clean energy sectors. Cubicpv was considering locations in Texas, where it would employ about 1,000 workers.

But a surge of cheap solar panels from China upended that project. I n February, Cubicpv canceled its plans to build the factory over concerns it would no longer be financially viable thanks to a flood of Chinese exports. As Cubicpv was gearing up to make wafers in the United States, prices of those components were dropping by 70%.

The setback underscores the concerns rippling across t he U. S. s olar i ndustry and within the Biden administration about whether President Joe Biden’s industrial policy agenda can succeed. Top administration o fficials have begun warning that efforts to finance a domestic clean energy i ndustry are being undermined by a surge of cheaper Chinese exports that a re d riving down prices and putting the United States at a competitive disadvantage.

The fate of the Cubicpv factory is the type of outcome that Treasury Secretary Janet Yellen has warned is likely if China does not stop dumping heavily subsidized green energy products into global markets at rock bottom prices. She took that message to China last week, warning that its industrial strategy was warping supply chains and threatening American workers.

China appeared t o dismiss those concerns. After Yellen’s meeting with C hinese P remier Li Qiang, his office said, “The development of China’s new energy industry will make an important contribution t o the worldwide green and low- carbon transition.”

Chinese over-capacity has been a central topic this week at the spring meetings of the International Monetary Fund and the World Bank. Before talks w ith Chinese officials at the Treasury Department o n Tuesday, Yellen said that China was not operating on a “level playing field” and warned that by producing more green energy products than the world can absorb, it was putting American firms and workers at risk.

“In the area o f clean energy products where we’re very concerned a bout overcapacity, we are highly reliant — t he entire globe is — on China,” Yellen said at a news conference. “They are the dominant source of supply in a number of areas, including batteries, solar panels and the like.”

Worries about whether the United States solar industry can actually compete with China has echoes of past efforts t o supercharge t hat sector. In t he e arly 2000s, the United States used a mix of tax incentives and federal loans to invest in the industry. But as China began to churn out its own solar components, prices fell, and startups like Solyndra filed for bankruptcy. China ultimately became the world’s leading manufacturer of solar components and