Chinese companies are increasingly divesting their clean energy\nassets in the United States after the Donald Trump administration\ntightened regulations prohibiting companies with Chinese connections\nfrom receiving government subsidies.<\/p>\n
At a factory in Dallas, Texas, approximately 20,000 solar panels are\nproduced every day. With a capacity of 5 gigawatts (GW), the facility is\ncapable of producing enough solar modules to supply electricity to about\none million homes in the United States annually. Now, the American flag\nflies over the factory. Until recently, however, this facility was built\nand owned by Trina Solar, one of China\u2019s largest solar panel\nmanufacturers.<\/p>\n
The change did not occur because the factory failed to compete. Just\ndays after commencing operations in 2024, Trina Solar divested the asset\nto T1 Energy. \u201cNever bet against the United States\u2019s engineering and\ninnovation,\u201d said Russell Gold, a senior executive at T1 Energy.<\/p>\n
A Wave of Divestment<\/strong><\/p>\n Since 2025, nearly US$9 billion of Chinese renewable energy\ninvestment in America has been cancelled, postponed, or sold to local\ninvestors. Two years prior, in 2022 and 20ability3, such transactions\nwere almost non-existent. For American investors, this situation\npresents an opportunity, with several assets changing hands at\ndiscounted prices. One buyer even noted that some transactions occurred\nwith discounts of up to 40%.<\/p>\n However, the sheer scale of these transactions raises a compelling\nquestion: does this shift in ownership truly reduce America\u2019s dependence\non the Chinese clean energy industry, or is it merely changing the name\nof the owner at the factory gates?<\/p>\n America Was Once a Magnet<\/strong><\/p>\n Ironically, this wave of divestment is occurring just as America had\nbegun to enjoy a surge in Chinese investment. Between 2022 and 2024,\nChinese companies committed US$15.5 billion to green energy projects in\nAmerica, approximately nine times larger than the previous four years.\nThe combination of subsidies from the Joe Biden era and the growth of\nthe solar panel industry made the American market a promising\ndestination for expansion.<\/p>\n The results were clear. US solar module production capacity increased\nto approximately 65 GW per year, with about 25 GW originating from\nmanufacturers with Chinese ties.<\/p>\n New Rules Change the Calculus<\/strong><\/p>\n The shift arrived after Donald Trump signed the One Big Beautiful\nBill Act last July. The regulation causes companies with Chinese\nconnections to lose access to several critical incentives,\nincluding:<\/p>\n Solar panel production tax credits through Section 45X;<\/p><\/li>\n Battery cell manufacturing incentives;<\/p><\/li>\n Various subsidies for the clean energy industry.<\/p><\/li>\n<\/ul>\n The impact is massive. A solar panel factory with a 5 GW capacity,\nsuch as the Dallas facility, potentially stands to lose up to US$350\nmillion in incentives per year. The government has also tightened rules\nregarding Foreign Entities of Concern (FEOC). Chinese company ownership\nis capped at a maximum of 25%, the use of Chinese technology licences is\nrestricted, and dependence on Chinese-sourced components must be\ngradually reduced.<\/p>\n For many manufacturers, these changes are enough to transform a\npreviously highly profitable market into one that is far more expensive\nto maintain.<\/p>\n Factories Continue to Operate<\/strong><\/p>\n Interestingly, almost no factories have actually ceased production.\nThe facilities remain standing, and production lines continue to run.\nOnly the owners have changed. This pattern is visible across various\ntransactions:<\/p>\n Corning acquired a 2 GW solar module factory in Arizona.<\/p><\/li>\n Boway sold a 3 GW factory in North Carolina for US$254 million,\napproximately 15% below its construction cost.<\/p><\/li>\n Jinko Solar divested 75% of its ownership in a 2 GW facility in\nJacksonville, Florida, to FH Capital.<\/p><\/li>\n The facility built by Trina Solar in Dallas is now operated by T1\nEnergy.<\/p><\/li>\n<\/ul>\n However, these transfers do not automatically change the factory\u2019s\ncontents. The production machinery still originates from China. The\ntechnology also continues to use Chinese designs, and many components\nused still come from the same supply chain. Only the company name at the\ngate has changed.<\/p>\n Breaking Away from China is Not That Simple<\/strong><\/p>\n America\u2019s ambition to build a more self-reliant clean energy industry\nfaces a simple reality: China still produces approximately 95% of the\nworld\u2019s polysilicon, the primary raw material for solar panels. This\nexplains why moving factory ownership is far easier than moving the\nentire supply chain.<\/p>\n Some companies are choosing to form joint ventures or restructure\nownership to continue operating in America. However, as stated by Mona\nDajani, head of energy transactions at the law firm Cooley, the primary\ngoal is more about complying with regulations than truly integrating\nbusiness operations.<\/p>\n A New Arena of Competition<\/strong><\/p>\n The story of the solar panel industry shows that trade wars are no\nlonger solely about import tariffs. What is being contested more\nfrequently is asset ownership, technological mastery, supply chains, and\naccess to subsidies. Who controls the factory is becoming just as\nimportant as who controls the raw materials. America wants to build a\nmore self-reliant clean energy industry. Yet, to this day, much of the\nindustry\u2019s foundation still rests on investment, technology, and supply\nchains originating from China. What is changing more rapidly is the\nownership of the assets; their dependence, however, is not necessarily\nso.<\/p>",
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