US Makers Face Challenges From Cheap Chinese Solar Products: Report

A recent report by SEMA collation on the state of US PV solar manufacturing discussed the importance of developing a domestic solar manufacturing supply chain in the United States. The report discussed the steps required to reduce dependency on foreign sources, particularly China, and to strengthen the country’s position in clean energy.

The report shared some past efforts and challenges in solar manufacturing, emphasising the need for supportive federal policies, such as tax incentives and enforcement of trade laws. It presented data on the expected economic benefits for the US solar sector and addressed concerns about China’s dominance in the solar market and the need for effective trade policies to counteract it.

It laid importance on the heavy reliance on foreign-sourced materials, particularly from China, in certain segments of the solar manufacturing supply chain. It is associated with the efforts required to make solar technologies cost-competitive with fossil fuels on declines in capital expenditure (CAPEX) costs. However, challenges arise from subsidized overseas manufacturers undercutting domestic investments, hindering progress in establishing a self-reliant supply chain.

The report mentioned, “The Biden administration’s initiatives, such as the IRA and the CHIPS Act, aim to steer America towards clean energy. Yet, historical challenges, like bankruptcies following the Recovery Act due to low-priced imports, underscore the need for comprehensive policy support and enforcement.”

It laid importance on, “Breaking the dependency on imported solar components would yield substantial benefits. Collaboration between public and private sectors is crucial, necessitating federal policies supporting domestic manufacturers and countering foreign subsidies and forced labor practices.”

He elaborated, “Despite promising developments, further action is needed to secure a resilient domestic solar manufacturing future. Projects like IRA are already showing potential, with projected capacity increases that could meet a significant portion of future solar demand.”

Studies indicated, “The substantial economic impact of a US solar sector, including job creation and value-added effects. However, China’s dominance poses a threat, with its below-cost production distorting the market and hindering US R&D investment. Enforcing trade policies remains a challenge, as evidenced by low denial rates of non-compliant imports. Given China’s significant role in solar-grade polysilicon production, stricter enforcement is imperative for safeguarding the domestic solar industry.”

The report stated, “In the US, demand for solar generation capacity is strong across residential, commercial, industrial, and utility sectors. But certain segments of the country’s solar manufacturing supply chain remain almost entirely dependent on foreign-sourced materials, primarily from China. Now, as subsidized overseas – manufacturers in China and Southeast Asia use their outsize market control and questionable trade tactics to undermine those investments, the onshoring progress is stalled as US manufacturers await further support to achieve the promised supply chain independence.”

It elaborated, “In the early days of solar adoption, technology providers made enormous efforts to lower the CAPEX needed to deploy solar PV systems to make them competitive with fossil fuel sources. Residential solar PV system costs dropped from nearly $9 per watt in 2010 to just over $3/W in 2018. Similarly, utility-scale solar PV system costs went from roughly $6.50/W to $1.35/W in that same period. However, in the years since, the cost decreases to deploy solar have become significantly less dramatic.”

Annual Solar Capacity Additions and Share of Total US Additions: 2024-2033

Annual Solar Capacity Additions and Share of Total US Additions: 2024-2033


It added, “The US is highly dependent on China for much of the polysilicon PV supply chain, which includes the processing of mined quartz into high-quality polysilicon, the pulling of ingots, slicing wafers from the ingots, the production of solar cells, and the final assembly into solar PV modules complete with weatherized housing.”

It mentioned, “As a direct result of IRA provisions, the US is seeing a significant increase in announced cell manufacturing and module assembly capacity. If even half of this announced capacity comes online, the US could produce enough cells and modules to meet nearly 100% of its new solar demand through 2027. If no new factory capacity came online after 2027, the country could still meet more than 90% of its new solar demand in 2028, dropping slightly to roughly 70% of new demand in 2033.”

It further explained. “Without effective trade policy, China’s continued dominance in the solar manufacturing market will severely harm the US solar industry. Prices of Chinese-made solar modules have declined by approximately 50% year-over-year—dropping so far below the cost of production that Longi, the world’s largest solar producer in China, recently asked the government of China to discourage below-cost production. Market distortion resulting from continued operations in China could drive away investment in US solar R&D, which would, in addition to preventing future growth of the silicon supply chain, inhibit the abilities of US producers to capture future thin-film or other advanced solar technology markets.”