Chinese solar companies are paying a high price for victory

Are Europe and China winning a battle over the solar industry?

Europe and China’s battle over the solar industry has been going on for two decades. Chinese solar-panel makers are winning with an unassailable lead: they now account for 80 per cent of global production capacity. But the cost of that victory is now looking too high. China dominates the solar panel sector’s entire supply chain.

Are Chinese solar companies more competitive on price?

Chinese solar firms have countered that their mastery of the technology makes them more competitive on price. Tariffs are a key theme in the U.S. election, with Republican former President Donald Trump proposing levies on all U.S. imports to stimulate U.S. manufacturing, including a 60% rate on any goods from China.

Is China's largest solar company evading American tariffs?

A year ago, the Biden administration accused one of China’s largest solar manufacturers of evading American tariffs. Now the company is building a massive panel factory in Texas — and it could receive more than $1 billion in tax subsidies under President Joe Biden’s signature climate law.

Does China's solar industry satiate the world's most power-hungry economy?

However, the Chinese solar industry’s ambitions extend beyond satiating the globe’s most power-hungry economy, China. Solar exports from China increased 34% in the first half of 2023 compared to the previous year. China’s solar manufacturing industry has played a crucial role in accelerating the global deployment of renewable energy.

Why are solar companies struggling in China?

Many of China’s provinces are struggling to service their debts. Solar companies must also compete for government largesse with firms in other industries that are grappling with overcapacity as China’s economy slows. More than a fifth of Chinese industrial firms were unprofitable last year, according to analysis by Rhodium, another consultancy.

Will China's solar supply chain be impacted by US tariffs?

That means Chinese factories in the U.S. would likely use imported components, giving Beijing even more control over the solar supply chain, said Mike Carr, who leads the Solar Energy Manufacturers Coalition, a trade group that has called for additional tariffs on Chinese components.