A robust solar energy industry in the United States is crucial to the national goal of a low-carbon future. But the outlook for solar power doesn’t look bright these days, as the United States has allowed China to dominate the industry. Failure to create a strong domestic solar manufacturing industry leaves the United States and our carbon reduction goals not only dependent on China, but also vulnerable if China blocks or threatens to block its solar exports as a form of retaliation to the future.
The United States was once a world leader in solar innovation and manufacturing. We invented photovoltaic technology in the 1950s to power satellites and spacecraft. And we have maintained our undisputed leadership in solar for decades. But lately, we have seen our solar industry being crushed as a direct result of China’s huge state subsidies to its manufacturers from the 2000s.
Since then, the United States’ share of global solar component shipments has fallen to less than 1% in 2021, from 13% in 2004. China’s share of solar component production has increased over the past two decades, from virtually nothing to almost 85% today. For some solar components, this could reach 95% in the coming years, according to a report published this week by the International Energy Agency. Simply put, the United States did not sufficiently support its solar companies, which could not compete against the Chinese state-led strategy to control the market.
President Biden has called for measures to increase U.S. manufacturing of solar photovoltaic modules and components. Although the White House statement never mentioned China by name, China and its market-distorting subsidies were central to the orders. Mr. Biden certainly knows that the United States must not remain dependent on an unreliable third party and economic adversary for our national energy security.
Even as Mr. Biden called for investment in solar generation, he took steps that deepened American dependence on China, at least in the short term. The Commerce Department has been investigating whether Chinese solar makers circumvent U.S. trade laws through third-party countries; even so, this administration has refused to use the trade rules enforcement by imposing a moratorium on new duties of up to two years. As a result, the United States will effectively turn a blind eye even if imports from Southeast Asia are determined to be the result of Chinese tariff evasions. This decision to waive enforcement could help solar installers in the short term, but it’s a big gamble because it doesn’t come with the essential building blocks needed to build our national solar industry.
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To end our dependence on China, we need to increase US solar production, so Congress needs to reach agreement on a spending deal that provides resources for large-scale clean energy development. scale as well as tax credits for solar manufacturing.
U.S. solar manufacturers say they could achieve the entire planned solar deployment by 2030 if Congress passes clean energy funding and solar manufacturing tax credits. These investments would create an all-domestic solar supply chain producing 100% American-made panels. Otherwise, we will perpetuate our dependence on Chinese solar imports and cripple American solar production forever.
Unfortunately, for now, the administration is forgoing enforcement and continuing to rely on foreign solar power until Congress approves legislation to promote domestic manufacturing. If the Commerce Department finds that China is indeed illegally diverting PV modules through Southeast Asia, President Biden will effectively accept the potential trade violations and waive the imposition of sanctions. It would give China a free pass just as efforts to hold China accountable on trade, forced labor in the supply chain and national security intensify. And if Congress does not act to stimulate the development of American solar manufacturing, our dependence on artificially cheap Chinese imports will increase.
Not establishing our own supply chains would be tantamount to the United States going from dependence on OPEC and Russia for energy to dependence on China. Along with the consequences of the main solution to uninterrupted climate change being subject to the whims of a rule-breaking foreign power, Americans will be locked out of the high-quality solar manufacturing jobs that will come from this transition. .
In a few months, we will know if the bet of the Biden administration has paid off. September 30 is the deadline for the Senate to pass a reconciliation bill that includes funding for clean energy and tax incentives for solar manufacturing. But whatever happens, one thing is clear: The White House and Congress cannot perpetuate America’s dependence on Chinese imports at the expense of American jobs and renewable energy security.
Robert Holleyman served as Deputy U.S. Trade Representative in the Obama administration from 2014 to 2017.
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