Cheap Chinese Solar Panels Are Flooding the US Market

China has eclipsed the rest of the world in solar panels. 

The country’s policy of heavily subsidizing its solar panel industry means that domestic US manufacturers can’t keep up with cheap imports pouring into their market, the Financial Times reported Wednesday. 

Outshining Everyone

China is the solar industry’s 500-pound gorilla, so much so that the International Energy Agency predicts the country will maintain an 80%-95% market share until at least 2028. The European Union is trying to slap tariffs on Chinese electric vehicles precisely because it feels it was burned by a flood of cheap solar panels that crowded out domestic competition. Despite US tariffs on imported Chinese solar panels and cells, they’re still significantly cheaper. The US imported a record amount of panels from January to November last year, according to the FT.

For US manufacturers, the surfeit of imported panels is inducing an intense whiplash, as many embarked on ambitious projects in the wake of the Biden administration’s Inflation Reduction Act (IRA) in 2022. Now, however, those projects are being scaled back, per the FT’s report:

• Bill Gates-backed manufacturer CubicPV said last month it was abandoning plans to build a new factory. CubicPV specifically makes silicon “wafers,” a vital component of solar cells, but the price of wafers has fallen 70% since the IRA was passed, Reuters reported.
• Mark Widmar, CEO of the US’ biggest solar manufacturer First Solar, told the FT that the US industry is in a “pretty dire situation,” adding: “If we become Europe, where we just open up the floodgates and China just overwhelms this industry, it’s going to be devastating.”

Sunstroke: Widmar is right about Europe’s solar industry — earlier this week, the EU hinted it won’t bail out domestic manufacturers that have lobbied hard for extra subsidies. Politico reported that 12 companies pushed for subsidies totaling roughly €880 million. In a letter to the European Commission viewed by Politico, the companies wrote that they’d be forced to close manufacturing facilities as soon as this month without any “emergency support decisions.” With no support forthcoming, the European Solar Manufacturing Council’s secretary general told Politico that those companies are shutting down 20% of Europe’s total solar module capacity next week. That’s not the kind of sunset you want to watch.