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China “does not want the U.S. to have its own domestic [solar] industry… it’s a pretty dire situation,” First Solar (NASDAQ:FSLR) CEO Mark Widmar told the Financial Times on Wednesday, a day after warning a Senate committee that the U.S. risks becoming “a de facto extension of China’s Best and Road Initiative.”
A flood of Chinese-produced solar panels is driving prices to record lows in the U.S., causing U.S. power companies to favor imports over more expensive domestic panels; in response, North American manufacturers say they are pulling back on expansion plans despite incentives available under the Inflation Reduction Act.
ETF: (TAN)
Manufacturers including First Solar (FSLR) have called for stricter enforcement of tariffs, such as striking an exemption for the two-sided type of solar panels that make up most of the imports, and bringing forward the end of the moratorium on duties against southeast Asian imports.
“The IRA subsidies are hugely lucrative, but they’re still not enough to compete against cheap imports,” BloombergNEF analyst Pol Lezcano said, anticipating cancellations and delays to solar manufacturing commitments which have totaled 115 GW since President Biden signed the landmark climate law.
While First Solar (FSLR) said it does not expect the IRA would disappear in a Republican administration, the company warned a loss of subsidies and weak tariffs risked the U.S. turning into Europe, where Chinese panels have overwhelmed the market and crippled domestic suppliers.
Widmar told FT, “If we become Europe, where we just open up the floodgates and China overwhelms this industry, it’s going to be devastating.”
