Trump's crackdown against solar companies linked to China stalls U.S. manufacturing boom
Solar companies, banks, and insurers stopped doing business at least half a dozen newly built U.S. panels factories due to uncertainty about whether their ties to China would disqualify them for clean-energy subsidies. Industry executives and documents examined by have confirmed this. This shift is a result of new policies from the Trump administration and threatens to undermine more than one-third of U.S. capacity for solar panels in factories originally built by Chinese companies. The policy uncertainty has not previously been reported as a factor driving installers and insurance companies away from U.S. factories that have ties to China. The new effects "coincide with President Donald Trump's efforts to ban Chinese companies from?U.S. The government's support for green energy will be cut and the market opened up. The policy may backfire, however, by threatening the growth of?U.S. Industry experts claim that the policy could backfire by threatening growth in?U.S.
Sunrun, America's largest residential solar installer is now one of the companies that avoids Chinese suppliers.
Keith Martin, a Norton Rose Fulbright attorney who advises on renewable energies tax deals, said that the situation is holding back financing of solar and storage projects.
The potential for far-reaching impacts on U.S. Manufacturing underscores the difficulty in decoupling China's global dominant position in renewable energy and green technology, driven by Beijing's heavy subsidies to Chinese firms.
China's global industrial policy presents a challenge to U.S. regulators, who are trying to stop Chinese firms while not putting at risk U.S. manufacturers of solar panels that rely on Chinese technology and equipment to make affordable and competitive products. The United States is limited in its options to expand renewable energy beyond importing panels from Chinese companies. This will result in higher prices.
Aaron Halimi is the chief executive officer of Renewable Properties. The San Francisco-based developer of small-scale utilities has moved most of its procurement to Tempe, Arizona's First Solar in order to avoid Chinese suppliers.
New uncertainty is arising in the?U.S. solar investments stems from provisions in the Trump-backed "One Big Beautiful Bill" that the Republican-controlled Congress passed in 2025. The law reduced clean-energy subsidies from the Biden era and prohibited certain countries, such as China, to secure those that were left. Treasury Department spokespersons have refused to say when the full guidance will be released on how to implement this law. Trump wants to expand the U.S. grid rapidly to power American data centers. Experts in the power industry say that solar installations combined with battery storage, which turns on when the sun doesn't shine, is the fastest way to increase electricity production because it's easier to build.
Trump has called renewable energies unreliable and expensive and implemented policies that promote the expansion of fossil fuel sources.
The White House has not responded to a comment request.
A spokesperson from the Chinese embassy in Washington called U.S. sanctions discriminatory, and stated that Beijing would protect its company's interests.
CHINESE SOLAR FIRM COMPLY WITH - BUT WITH A CATCH
Wood Mackenzie estimates that China controls about 80% of the global manufacturing of solar equipment. LONGi and?Trina were among its companies that built and operated U.S. plants as soon as former President Joe Biden’s 2022 climate change law introduced a tax credit to clean-energy factories.
Solar equipment manufacturers have since announced investments of nearly $43 billion, supporting 48,000 projected jobs, according the Solar Energy Industries Association.
The domestic manufacturing has now been aligned to the demand in the United States for solar panels. This eliminates the need to import panel. This could change, however, if many U.S. manufacturers caught in regulatory uncertainty find themselves unable to compete.
The Trump-backed law limits Chinese companies' ownership to 25% of plants that are seeking federal subsidies. It also imposes sourcing restrictions and prohibits Chinese firms from exercising "effective control". The companies say that the subsidies are essential to remain competitive. They include tax credits on solar manufacturing and installation.
Chinese companies have tried to comply with the new regulations by selling factory stakes, or restructuring their business. Most have maintained financial ties to their U.S. factories, often in the form profit-sharing agreements or supply contracts, according to an analysis of corporate disclosures.
Industry officials are unsure if the remaining links will disqualify these factories from receiving U.S. Clean?energy Manufacturing credits. Installers, including the industry giant Sunrun, are refusing to work with these factories in the absence of guidance from Treasury Department. Banks and insurers also refuse to provide financing or coverage.
PARING BACK APPROVED SOURCES
A document obtained by has revealed that Sunrun sent a list of solar panel suppliers approved in January to its installation partners.
Only non-Chinese companies were included in the list, such as Qcells and REC. Silfab, Elin, and REC are also on it. Previously it included Canadian Solar and JA Solar as well as Jinko LONGi Trina – all China-linked companies.
Sunrun's Deputy Chief Financial officer Patrick Jobin stated in a press release that the company has taken a "conservative stance" and does not purchase equipment from manufacturers who could raise concerns about compliance.
Sean Hayes, the general manager of Palmetto in North Carolina, said that despite their efforts to comply, they also steer clear of China-linked manufacturers.
Three people who are familiar with these deals, but spoke anonymously, said that Morgan Stanley, JPMorgan, and Goldman Sachs, among others, have reduced tax-equity funding for certain solar projects, due to concern about future Treasury interpretations which could retroactively invalidate the tax credits.
The banks refused to comment.
According to Antony Joyce of Marsh, a tax insurance specialist, insurers have become more aggressive, refusing insuring companies against the possibility that they would be denied clean-energy tax credit.
The companies with the best position are those that don't have any clear ownership ties in a country that is of concern, said Peter Henderson, principal at Baker?Tilly. He said Treasury's guidance would be critical.
The Solar Energy Manufacturers for America Coalition is a trade association that represents non-Chinese firms with U.S. facilities, such as First Solar, Hanwha Qcells, and has called on the Treasury Department to adopt a strict stance.
"CLEAREST WAY OF COMPLYING"
The main issue that is driving away firms is the fact that Chinese companies maintain ties with their factories rather than making a clean cut. The 25 gigawatts that are attributed to factories built and operated originally by China-linked companies represent at least half of the nation's 66 GW operating capacity for solar module production.
Elissa pierce, an analyst with Wood Mackenzie, said that "very few Chinese manufacturers decouple themselves from their U.S. factory?entirely".
JinkoSolar of China, which has a factory located in Florida, as well as Boviet Solar, whose panels are produced in North Carolina by its parent company, Boviet Solar, both said that they were looking for investors.
According to an Invenergy spokesperson, Illuminate USA is a joint venture formed by LONGi in China and Chicago-based Invenergy. The Chinese company has reduced its ownership stake in a 2024 Ohio plant to less than 25%, and the intellectual property agreement between LONGi and Invenergy has been renegotiated.
Invenergy, however, is not sure if the plant will survive. It employs approximately 1,700 people. Illuminate did not respond to a request for comment.
In comments made to the Internal Revenue Service in March, the company stated: "The continuation of Illuminate and other U.S. Manufacturers remains at risk." (Reporting and editing by Richard Valdmanis, David Gaffen, and Nichola Groom)
(source: Reuters)
