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China’s strategy to prevent the rise of a robust U.S. solar industry is pushing domestic firms to the brink, as highlighted by First Solar’s CEO Mark Widmar in an interview with the Financial Times. Widmar’s comments came shortly after he cautioned a Senate committee about the danger of the U.S. becoming a mere extension of China’s ambitious Belt and Road Initiative.
A mounting influx of Chinese-manufactured solar panels flooding the American market is driving prices to unprecedented lows, compelling U.S. power companies to opt for cheaper imports over domestically produced panels. This trend has led to a situation where North American manufacturers are scaling back expansion plans despite incentives provided under the Inflation Reduction Act.
Industry players, including First Solar (FSLR), are advocating for stricter enforcement of tariffs to level the playing field. Suggestions include eliminating exemptions for two-sided solar panels, a dominant portion of the imported products, and advancing the end of the moratorium on duties against imports from Southeast Asia.
Commenting on the current scenario, BloombergNEF analyst Pol Lezcano expressed concerns over the viability of solar manufacturing commitments. Anticipating cancellations and delays in projects amounting to 115 GW since the enactment of the groundbreaking climate law by President Biden, Lezcano pointed out that while the IRA subsidies are attractive, they may not suffice to counter the allure of low-cost imports.
First Solar (FSLR) emphasized that the company does not foresee the disappearance of IRA benefits under a Republican administration. However, there are apprehensions regarding subsidy cuts and feeble tariffs that could result in a scenario akin to Europe, where Chinese panels have dominated the market, causing severe harm to local suppliers.
Widmar, in his conversation with FT, painted a grim picture of the potential future, warning of devastating consequences if the U.S. were to follow Europe’s path and allow a flood of Chinese products to overwhelm the solar industry.
