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UPDATE: Senate adopts symbolic ban on solar projects using materials sourced from China

By Kelly Pickerel | August 11, 2021

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AUGUST 16 UPDATE: The amendment was adopted as non-binding and essentially only symbolic. Solar Power World apologizes for the premature alarm. We will continue to improve our comprehension of the Congressional voting process.

Original story below:

In addition to passing a $1 trillion infrastructure bill yesterday, the U.S. Senate this morning adopted a $3.5 trillion budget plan before adjourning for summer recess. Both congressional chambers will now draft a final budget. A vote on final legislation will happen within a few weeks.

Solar cells at SolarWorld’s Oregon manufacturing facility. Archive photo from the Oregon Department of Transportation.

The four core areas of spending focus on families, climate, healthcare, and infrastructure and jobs. Included in the plan is one amendment that could significantly affect the U.S. solar industry.

A proposal from Sen. Dan Sullivan (R-Alaska) was adopted (90-9) that would prohibit any renewable energy project using materials produced in China from receiving federal funds and subsidies. In layman’s terms: Any solar project using components produced in China could not receive the federal ITC or other tax breaks.

“If we are going to build out our domestic renewable energy industry, we need to have an honest conversation about where we are sourcing these materials,” Sen. Sullivan said. “We cannot continue to be dependent on China for critical minerals — resources that are crucial to our economy and national security, and which we have in abundance in the U.S., particularly in Alaska. By developing our national supply chains and processing capabilities, we can create thousands of good-paying jobs, protect our national interests, deny economic support for violators of basic human rights and build out America’s all-of-the-above energy sector.”

China controls 80% of the world’s polysilicon supply, with nearly half being produced in the Xinjiang province, which has been signaled out as a region using forced labor. Polysilicon is the foundational building block of crystalline silicon solar panels, the most common solar panel type installed on utility-scale, commercial and residential solar projects.

Solar Power World released an in-depth look earlier this week at the polysilicon and solar manufacturing battle happening right now between the United States and China. 

With no ingot, wafer or solar cell manufacturing present in the United States right now, it is highly likely that all solar panels coming into the country have some Chinese-sourced material. U.S. Customs and Border Protection has already issued full bans on completed solar panels that use polysilicon from certain companies located in Xinjiang.

The Senate budget amendment would not just affect solar panels and their materials coming from China, but any component used in a solar project.

Solar Power World will continue to follow this story as the budget travels through final approvals.

 

About The Author

Kelly Pickerel

Kelly Pickerel has over a decade of experience reporting on the U.S. solar industry and is currently editor in chief of Solar Power World.

Comments

  1. SolarJim says

    August 17, 2021 at 5:00 pm

    This is a no win situation for the US solar industry. We need policy to help domestic production and a pathway to get there. It would take years for enviromental to get domestic wafer and ingot productions to happen. Perhaps a tax credit is needed….I am not sure how they intend to meet short term climate targets without solar.

    Reply
  2. John Gifford says

    August 17, 2021 at 12:28 pm

    The answer is not looking back on our manufacturing failures of the late 20th century. It’s to look ahead to what is possible if only we have the courage to make tough decisions such as this. This is exactly the impetus we need to reinstate our supply chain and build American jobs. We can’t rely on China to help us achieve Net Zero and build a quality renewable infrastructure. As Americans, we can, and must, demand better than Made in China, a country, a philosophy, a domineering (and desperate) government that President Biden rightly recognizes as America’s chief adversary and opponent in the 21st century.

    Reply
  3. Daniele says

    August 17, 2021 at 7:33 am

    I wonder whether this can be taken as an additional strong positive for nuclear energy. Conceptually , of course, practically i do not know , but clearly good headline for uranium

    Reply
  4. Crusty says

    August 12, 2021 at 10:46 pm

    This is a losing proposition for America. Any idiot can see it’s going to take 10 years to build a domestic supply chain that can serve American demand. In the meantime, China will likely accelerate the conversion of its own energy to renewables that are now even cheaper than the dirt-cheap coal they have historically relied upon.
    China will run larger and larger fractions of its economy on 1-2 cent USD per kWh electrical power. That’s right — the country that conquered manufacturing by beating everyone else on price is about to drop its energy input costs by another 80-90%. If their PV manufacturers aren’t selling to U.S. buyers, that just accelerates the buildout in China and about two dozen other aggressive renewable buildout nations.
    News flash. The jobs don’t come from manufacturing solar panels (the global PV manufacturing industry is heavily automated and employs fewer and fewer humans per GW manufactured). The bulk of PV installation jobs are effectively temporary, although the tiny fraction of PV maintenance jobs are permanent. But the real jobs come from having cheap, sustainable and efficient sources of energy to power the economy (in the U.S., each GW of PV installed supports about $1 to 1.5 billion of annual GDP for 25 years (panel lifetime), or something like 250,000 to 375,000 FTE job years in an advanced human-services-heavy economy). That same GW is good for maybe 1,500 FTE job years in PV manufacturing, 5,000 FTE job years in installation work and 10,000 to 15,000 Operations and Maintenance FTE job years over 25 years (panel lifetime).
    By all means, let’s build a domestic industry. But if we wait 10 years to build out our own renewable power base, we’re screwed. And the opportunity costs of jobs we’re not supporting with cheaper cleaner energy will massively outweigh whatever marginal gains we see in manufacturing, while we wait for the American supply chain to catch up to American demand.

    Reply
  5. Bill Nussey says

    August 12, 2021 at 5:05 pm

    The US absolutely needs to restart its domestic supply chain of polysilicon, wafers, and cells but this approach is like trying to crack open an egg with a sledge hammer. There are countless more proactive, less chaotic approaches political leaders might take that will result in the same outcome. For instance, mandate that an increasing percentage of the US military and government facilities need to purchase US made solar products. This would create a powerful market signal that would attract tremendous private capital. Or, take a page from China’s book, and offer targeted loans and incentives for several key players in each stage of the supply chain. Best yet, extend the ITC to include building wafer and cell manufacturing plants.

    Reply
    • Crusty says

      August 13, 2021 at 1:16 pm

      “I don’t like buying my food from the grocery store down the street because the cashier looked at me funny once, they continue to drop their ugly flyers on my porch every week and they never contribute to my kid’s Little League team. I’ve had it and I no longer want to be dependent on them for my family’s food (which, yes, is a strategically important thing we need to actually stay alive). So, I’ve wisely decided to stop eating food from the grocery store during the next three years it’ll take me to turn my thistle-strewn, ant-ridden quarter-acre backyard into a sophisticated hydroponic greenhouse and chicken coop that will meet all my food needs. This is going to be awesome….”

      Reply
      • Jim says

        August 17, 2021 at 4:55 pm

        LoL

        Reply
  6. Jason J says

    August 12, 2021 at 1:23 pm

    God job, Sen. Dan Sullivan (R-Alaska)! Paralyze Cali’s grid with their own imagined Xinjiang.

    Reply
  7. Daniel Courselle says

    August 12, 2021 at 12:15 pm

    Restricting the import of finished panels from China only delays developments from not only starting but even considering developing solar fields. Supply shortage is already controlling the time element.
    To get the proper factories in place takes time adding to the additional restrictions and control of the environmentalists. How does this create jobs here with all these delays?
    Why not put a heavy price to import along with an end of life factorif made outside the USA? That would give us setup time to produce panels, methods to recover and rework old panels from already manufactured and reusable products. This keeps the labor force busy and items that should not go to the dump.

    Reply
  8. Joseph Hess says

    August 12, 2021 at 5:18 am

    Makes sense, by importing PV components from China, we also import CO2! There are nanotechnology solutions available today that allow to change this and that also apply to the battery market which is not better off with import of CO2 and other challenges.

    Reply
  9. Chrysler says

    August 11, 2021 at 5:50 pm

    Is this amendment even compatible with WTO rules? Singling out one nation in a quite large industry with discriminative policy sounds directly contradictory to the “trade with no discrimination” principle of WTO. This is not even based on anti-dump or other plausible reasoning. Wonder where this will lead to. Will China retaliate with similar policy for imports from US?

    Reply
  10. Solarman says

    August 11, 2021 at 3:02 pm

    “A proposal from Sen. Dan Sullivan (R-Alaska) was adopted (90-9) that would prohibit any renewable energy project using materials produced in China from receiving federal funds and subsidies. In layman’s terms: Any solar project using components produced in China could not receive the federal ITC or other tax breaks.”

    Therein lies the problem. Jinko Solar has a factory in the U.S. and yet if one looks at many of the companies assembling and selling solar PV panels as USA manufactured, when one digs down, can see references to Chinese companies for the (supply chain) of individual components of a solar PV panel from cells to aluminum framing of the panels from China. I imagine large manufacturing facilities like Hanwah Q cells out of South Korea may also be using supply chain components from China in their cell and panel manufacturing carried on in the the U.S.. All of this political maneuvering and bluster, will come down to “how low can (they) go” in utility quantity manufacturing line runs from China to the World market. The U.S. has no working silicon foundry’s right now, it seems China has at least four very large silicon foundry’s online. All Dan Sullivan has managed to do is get rid of the ITC without sunsetting the ITC. IF China manufactures a nominal 20% solar panel efficiency product, with manufacturing costs of $0.08/watt off the line in quantities, the rest of the World will benefit with cheap modules for large solar PV farms in their countries and the U.S. can once again cut it’s own throat and constrict solar PV adoption again.

    “In layman’s terms: Any solar project using components produced in China could not receive the federal ITC or other tax breaks.”

    In layman’s terms, it sucks to be anyone “other” than First Solar in the U.S. solar PV panel market right now.

    Reply

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