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Despite the overcast weather, the opening ceremony for Jinko Solar’s new factory in Jacksonville, Florida, was a decidedly upbeat affair. Under a large, white tent, amid a cluster of warehouses belonging to corporate titans like FedEx and Bridgestone, the event’s speakers sounded victorious and full of promise. 

To Lenny Curry, the mayor of Jacksonville, the long and squat rectangular factory represented “the opportunity for Jacksonville to become a major player in solar technology.” Florida Secretary of Commerce Jamal Sowell noted that while “Florida has long been a destination for vacations,” it was now “also the premier destination for innovators like Jinko Solar.”

The attendees had reason to feel triumphant. It was February 2019, and the Jacksonville factory suggested that a decade of U.S. solar trade policy was finally paying off. After benefitting from generous state subsidies and anti-competitive dumping practices in the early 2010s, Chinese solar panel manufacturers — including Jinko Solar — had mostly wiped out U.S. competition. Determined to fight back, President Trump initiated a fresh round of tariffs on global solar imports in January 2018. 

Jinko Solar,¹Jinko is listed on the New York Stock Exchange and among its large investors are U.S. funds such as Invesco, BlackRock, Pimco and D.E. Shaw, according to Jinko’s website. which is the second largest solar panel manufacturer in the world with a market capitalization of more than $2 billion, originally protested the tariffs, but they quickly proved effective. Only 13 months later, Jinko executives traveled to Jacksonville to celebrate the opening of a factory that promised to spit out two “American-made” solar panels a minute. Two other foreign firms announced similar plans to expand in the United States. Finally, it seemed like the U.S. would have significant solar panel manufacturing on its soil, allowing the country to reap more of the economic benefits of the green energy revolution. 

But, nearly three years on from Jinko Solar’s warm welcome in Jacksonville, the company’s twists and turns in the U.S. market reflect America’s tenuous relationship with Chinese solar — at once dependent and antagonistic. 

Many solar analysts, for instance, say Jinko’s production in Jacksonville is a red herring. Far from proving that tariffs are the secret to initiating the great revival of U.S. solar manufacturing, the Jacksonville factory has hardly been an economic boon to Florida or to innovation. Jinko’s Jacksonville factory uses imported cells from its Malaysia factory to assemble the final solar modules in Florida. According to a Bloomberg New Energy Finance analysis, only a quarter of the value in U.S.-assembled modules is created in the country while 61 percent of the value creation takes place in China, where the upstream manufacturing occurs. 

“There’s this mystique around manufacturing in the U.S.,” says Jonas Nahm, an assistant professor at Johns Hopkins School of Advanced International Studies who studies energy policy. “But it’s not borne out in reality when you bring the stuff back.” 

The Jacksonville factory’s vast exterior also belies its economic impact. Inside, highly automated machines assemble solar cells into the final product: solar modules. Only about 200 people are employed in the process. Jinko, meanwhile, employs nearly 25,000 people worldwide, mostly in China. 

“You hear about factory announcements in the U.S., but unless you tackle the entire value chain, and try to change something further upstream, the dependence on China is still going to be there,” says Pol Lezcano, a solar analyst at Bloomberg New Energy Finance. 

U.S. solar installation companies also argue that Trump’s tariffs slow down solar adoption since they raise the costs of solar projects. These companies are responsible for far more jobs than solar panel manufacturers, and the Solar Energy Industry Association, which represents many of them, estimated that solar installations will be 7.5 gigawatts lower between 2019 and 2021 than they would have been without the tariffs.² That figure, 7.5 gigawatts, is roughly the equivalent of losing one-third of all 2021’s installations.

There’s this mystique around manufacturing in the U.S.… But it’s not borne out in reality when you bring the stuff back.

Jonas Nahm, assistant professor at Johns Hopkins School of Advanced International Studies

“We have not substantially reshored significant parts of the solar supply chain as a result of these policies,” says Michael Davidson, an assistant professor of engineering and policy at University of California, San Diego. “If anything, we’ve made it more expensive for Americans to install solar, and we’re also making it more difficult to achieve our climate objectives.”

With Trump’s tariffs set to expire in February 2022, many expected the incoming Biden administration to repeal them. Growing American clean energy jobs, after all, was a signature campaign promise, and the Biden administration set out a highly ambitious goal to completely decarbonize America’s electricity grid by 2035. That would require solar’s share of electricity generation to increase from 3 percent to 40 percent by 2035, according to a recent Department of Energy study. 

But, as with any U.S.-China trade dispute, it’s not that easy. The U.S. International Trade Commission, a federal agency that investigates trade issues, recently recommended that Biden maintain the tariffs for four more years, arguing that “there is evidence that the domestic industry is making a positive adjustment to import competition.” For instance, Arizona-based First Solar is the only American company among the top 10 global manufacturers — a list dominated by China — and analysts say the tariffs have been critical for the company’s recent success. 

“Tariffs have given them room to operate,” Lezcano says, adding that the administration knows that “the tariffs are this fine line between the current module makers in the U.S. being able to sell their products and compete” and being driven out of business. 

Further complicating Biden’s calculus are recent reports that factories at the top of the solar supply chain in China’s far western Xinjiang region are using forced labor. The U.S. government is now barring the entry of certain solar products believed to be tied to forced labor, but some researchers argue it will be difficult to ensure any imported solar products — to include Jinko’s — aren’t built using forced labor so long as Chinese companies source their products from Xinjiang. A vocal group of American politicians are calling for more robust industrial policies to bring the full solar supply chain back to the United States. 

Meanwhile, the climate clock keeps ticking. According to Department of Energy projections, further trade measures and disruptions in imports will almost certainly prevent the U.S. from reaching its solar goals. 

“The Biden administration is still figuring out whether there is a way to reduce reliance on China and pick up the pace of the energy transition in the U.S.,” says Ilaria Mazzocco, a fellow at the Center for Strategic and International Studies in Washington, D.C., who studies Chinese energy policy. “I’m not sure there is any short-term solution to that.” 

MOVIN’ ON UP

Solar technology, analysts note, is not all that complicated. The first solar cell was invented back in 1954 by American scientists at Bell Labs in New Jersey. By tinkering with a razor blade-sized strip of silicon, they discovered a way to convert the material, which normally doesn’t conduct electricity, into a highway for electrons. Mixing the silicon with other elements gave one layer of the solar cell a positive charge and the other a negative charge; incoming photons would hit the negatively charged layer and free the electrons to flow through the silicon sandwich. From there, the electrons could be directed through metal as electricity to power ever larger devices. 

That first solar cell was a monumental breakthrough, but it was initially inefficient at harnessing the sun’s energy. In the following years, the technology was deployed for niche uses, such as by NASA to power satellites. The U.S. went on to lead the world in nascent solar cell production through the 60s and 70s, but it wasn’t until Japan stepped in that the business started to really take off. While solar cells were still relatively expensive, the Japanese government’s industrial policy helped spur the commercialization of solar as a way to charge small electronics.

Japanese companies eroded U.S. market share — it dropped to one-third by the 90s — but it was Chinese companies that dealt a more decisive blow to U.S. businesses. Responding to generous subsidies for renewable energy projects in Germany, several Chinese companies broke into the industry in the early 2000s. 

“There was a high level of competition — really cutthroat competition — which spurred the manufacturers to find new processes to lower costs,” says Mazzocco. 

Solar manufacturing starts with a simple material: sand. Silicon, the main component in sand, is the second most abundant element on earth, and the key ingredient in solar cells. It is purified into polysilicon, then formed into shiny tube-shaped ingots, which are sliced into wafers as thin as a human hair. These wafers are arranged in hand-sized solar cells before being joined together into the larger solar modules or panels seen across rooftops and deserts. 

Since the production process is relatively straight-forward, the panels last for years, and U.S. silicon reserves are abundant, Mazzocco says U.S. reliance on Chinese solar panels is fundamentally different from its reliance on other energy sources, such as other countries’ oil — the supply of which can be turned off.

“It’s not that the U.S. doesn’t know how to make solar panels,” she says, “it’s just that we don’t know how to make them cheaply and at scale. If there were some sort of national security emergency, the U.S. could set up a solar panel production program.”

It’s not that the U.S. doesn’t know how to make solar panels… it’s just that we don’t know how to make them cheaply and at scale. If there were some sort of national security emergency, the U.S. could set up a solar panel production program.

Ilaria Mazzocco, fellow at the Center for Strategic and International Studies

Chinese firms, however, have excelled at process innovation: reworking manufacturing techniques to produce solar at a much higher speed and scale. For instance, a 2014 study authored by Johns Hopkins’s Nahm, describes one Chinese solar company learning about a new material to increase the efficiency of its solar cells and then integrating it into its existing production lines in a matter of months.   

By constantly revamping manufacturing methods, the Chinese solar companies were able to quickly compete with industry incumbents. 

“Americans really value product innovation, but they don’t value process innovation very much,” says Zhang Wei, an associate professor in the department of innovation, entrepreneurship, and strategy at Tsinghua University. 

These innovations eventually allowed Chinese solar companies to move up the supply chain. Initially, most of them only manufactured the easiest product — the final module — while relying mostly on the U.S. and Germany to do the silicon purification, the most complex step of solar manufacturing. But as the Chinese companies grew, they started purifying the silicon themselves, thereby cutting costs — and it wasn’t long before their global market share skyrocketed. By 2007, China produced more solar modules than any other country, according to Gregory Nemet’s book, How Solar Energy Became Cheap. 

Jinko Solar was a relative late-comer to this scene. Founded by a pair of brothers in their 30s, Li Xiande and Li Xianhua, and their brother-in-law, Chen Kangping, Jinko started operating in 2006 in southern China’s Jiangxi Province. The Li brothers had backgrounds as entrepreneurs and had watched their older brother’s solar company, ReneSola, succeed. They launched Jinko with a focus on the export market.³Li Xiande had worked for ReneSola and Li Xianhua had worked at another solar company, Zhejiang Yunhua. Also, Jinko began by working with ReneSola. ReneSola Power is now also a New York Stock Exchange listed company with operations in the U.S.

At the time, the European Union and the U.S. dominated global renewable energy generation, producing 30 and 10 times as much solar electricity respectively compared to China, according to the International Energy Agency. Jinko quickly capitalized, and the company said its revenue grew nearly 20-fold from 2006 to 2008. Although the financial crisis set it back in 2009, a year later Jinko became the ninth Chinese solar company to go public on a U.S. exchange.

Entrepreneurial drive and innovation alone, however, do not explain the remarkable rise of China’s solar industry. While the majority of these companies were privately-owned, local governments eager to attract manufacturing to their region played a role in boosting solar early on. Things really took off after 2009, however, when the central government also threw its weight behind the industry.

The global financial crisis rocked demand just as supply was ballooning, but the central government quickly stepped in to institute an electricity market subsidy, thus making China a consumer of solar energy — not just a producer of exports to Europe and the United States. The government also provided hefty financial support through lending from state banks. According to Nahm’s 2017 paper, Chinese solar and wind companies secured credit lines worth $47 billion from Chinese banks between 2010 and 2012, with China Development Bank, a state policy bank, contributing the lion’s share. Jinko was among them. It signed a $1 billion agreement with the bank in 2012 that went towards its overseas expansion.⁴Also, in 2014, China Development Bank International, an affiliate of the state policy bank, and New Horizon Capital, a private equity firm cofounded by the son of former prime minister Wen Jiabao, were part of a consortium that invested $225 million in Jinko, according to the company’s press release. 

Although the financial crisis could have sunk the still-nascent industry, the Chinese government’s cash infusion and policies kept things afloat. And in retrospect, notes Nahm, China’s solar giants opened up the possibility for a clean energy transition globally. 

“In many parts of the world,” he says, “solar is now the cheapest form of energy, thanks to the Chinese support for that industry early on.” 

DOUBLING DOWN

The Chinese industry’s ascent, however, led to a severe backlash from incumbents in the U.S. and EU that were being driven out of business. In response to a series of petitions from beleaguered American manufacturers, the U.S. investigated Chinese solar companies, including Jinko, and found that they had received unfair subsidies and dumped panels in the U.S. at non-market prices. The Department of Commerce placed tariffs on Chinese solar cell imports in 2012 and solar modules in 2014. The EU followed suit. 

“These remedies come just in time to enable the domestic industry to return to conditions of fair trade,” Mukesh Dulani, the U.S. president of one of the petitioners, SolarWorld Americas at the time, said in a 2014 statement published in Greentech Media. “The tariffs and scope set the stage for companies to create new jobs and build or expand factories on U.S. soil.”⁵SolarWorld Americas no longer exists.

But SolarWorld never bounced back. Its Oregon factory was sold in 2018 and the wider surge in U.S. manufacturing didn’t materialize. Between 2012 and 2017, 25 American solar manufacturing companies shut down, and as of 2017, the U.S. Trade Representative’s office stated: “The U.S. solar industry had almost disappeared.”

While Chinese companies were initially hit hard by the tariffs, many shifted production overseas, first to Taiwan and then to Southeast Asia to avoid them, according to a 2017 Stanford report. Jinko’s annual filings show that its sales into the U.S. market actually grew from 3 percent of its revenue in 2012 to 26 percent in 2015, when the company established a Malaysian solar cell and module plant.

Despite the tariffs’ failure to revive the U.S. solar industry, President Trump decided to double down. In January 2018, he added another round — a 30 percent tariff on solar cell and module imports from most countries, not just China. 

Historically, this type of tariff — called “safeguard tariffs” or “Section 201” tariffs — has been used sparingly by the United States since they are so sweeping. The law requires that the tariffs only be used when the president thinks the social and economic benefits of supporting industries injured by imports exceeds the costs of a potential price hike to consumers. The last time the trade tool had been used was to protect U.S. steel under President George W. Bush in 2001.  

“Bush took his steel tariffs off after about a year and a half — he didn’t even get close to three years,” which is historically what has been done, says Thomas Prusa, an economist at Rutgers University who specializes in international trade. “But here we have a situation where President Trump granted four years to solar panels.” 

U.S. solar installation companies decried the move, arguing that by raising the price of imports, the cost of installing solar in the U.S. would climb. The Solar Energy Industry Association estimated that 62,000 solar employment opportunities would be lost from 2017 to 2021 as a result.

These predictions have mostly borne out: By imposing tariffs, and thereby raising the price of solar imports, the cost of installing solar in the U.S. is now far higher than other countries. According to a report in Greentech Media, U.S. solar modules are 85 percent more expensive than those in China and 79 percent more expensive than those in Europe, where officials decided to drop tariffs. 

The tariffs were also only partly successful in terms of one of their original goals: taking a bite out of Chinese companies’ U.S. exports. Initially, Jinko — which had come to rely on the U.S. as its largest overseas market — saw its share of revenue from the U.S. drop from 36 percent in 2016 to 11 percent in 2018, according to its S.E.C. filings.

But this was short lived: a loophole introduced in 2019 allowed for the tariff-free import of a certain kind of panel (bifacial, or two-sided panels) from China. After the announcement of the loophole, Chinese module imports surged.

“It’s hard to know when we’re going to realize — like Europe [did when it dropped its tariffs] — that this is not a good path to go down,” says Prusa, who has been a consultant for SEIA.⁶The Solar Energy Industry Association “It might take quite a while.”

STUCK IN THE MIDDLE

With Biden taking office and championing a strong climate agenda, many expected he would finally put an end to the solar trade battles. But instead, supporters of green energy in the U.S. are facing a new conundrum: human rights violations may be embedded in China’s alluringly cheap solar supply chain. 

In May 2021, a report published by researchers at Sheffield Hallam University detailed allegations of forced labor in Xinjiang solar factories — where the U.S. government has said a genocide against the native Uyghur population is being carried out. The report had sweeping effects for the solar industry, and Laura Murphy, one of the report’s authors, says there is little chance companies like Jinko, which has a factory in Xinjiang, aren’t also implicated in forced labor. 

“I found some evidence that every single company operating in Xinjiang was engaged in labor transfers or had a supplier that had engaged in labor transfers, so essentially everything coming from Xinjiang is tainted with forced labor,” says Murphy. 

Jinko’s Xinjiang factory is located in an industrial park that also houses a prison and an internment camp, according to the report. Murphy says that doesn’t mean the company is associated with the prison or camp, “but it is an indication of just how closely this system of internment is operating to these corporations.”

According to the Sheffield report, in 2020 JinkoSolar’s Xinjiang factory hired 78 subsidized, formerly unemployed workers who were transferred from the local government. Later in 2020, Jinko also received subsidies to employ 40 poor workers from southern Xinjiang.

Jinko, however, strongly disputes the allegations of forced labor. In a statement to The Wire, a Jinko spokesperson said: “As confirmed by our respected international human rights experts, these two programs are not government worker transfer programs. These two programs are a COVID relief program and a common social subsidy program, both available nationally and to all eligible workers, not any specific group or minority.”⁷The Jinko spokesperson said that Elevate, a Hong Kong-based supply chain consultancy, made this determination. However, Murphy and other observers have questioned the validity of audits conducted in Xinjiang. 

The Chinese government has also dismissed allegations of forced labor in Xinjiang. But in June 2021, the U.S. Customs and Border Protection Agency said it also found evidence of forced labor in the solar supply chain. The agency instructed U.S. ports to bar products containing certain Xinjiang materials from entering the country — a decision that has already impacted Jinko’s imports and could affect just about every major Chinese solar manufacturer.

The broader industry is in the midst of a reckoning over these allegations. Even with the factory expansions after Trump’s tariffs, U.S. solar development is heavily reliant on imports, with nearly all wafers and cells produced in China. Through the U.S. Solar Energy Industry Association, more than 300 companies, including Jinko, have pledged to address forced labor. On its earnings call at the end of November, Jinko said it would have a full value chain, from polysilicon to module production, operating entirely outside of China by the end of the first quarter in 2022.

But even as companies make changes, the charges against Chinese solar companies have stimulated a broader debate among U.S. policymakers about the ethics of sourcing solar products from Chinese companies altogether. This month, Congress passed the Uyghur Forced Labor Prevention Act, which will block the import of any goods produced in Xinjiang until they are proven to be free of forced labor. Senator Jon Ossoff, a Georgia Democrat, has also introduced a bill that aims to bring the entire solar supply chain to the United States by giving U.S. manufacturers tax credits for every unit of solar equipment they produce. Sen. Ossoff has pushed to have the solar credits included in Biden’s Build Back Better package, which is under review in the Senate.

“In my view, it is the only viable, well-thought-out policy to bring solar manufacturing back to the U.S.,” says Lezcano, of BNEF. “In the past, incentives were based on capital expenditures, which means that companies received subsidies to build the plant, but were not encouraged to continuously improve and upgrade their production. As a result, U.S.-module assembly plants quickly became obsolete.”

It makes little sense for the U.S. to try to duplicate China’s model of solar manufacturing… We should focus on the next generation of solar technologies being developed by U.S. innovators.

Joanna Lewis, professor in the energy and environment department at Georgetown University

The question remains, however, if it’s in the best interest of the U.S. to bring solar manufacturing back. 

“It makes little sense for the U.S. to try to duplicate China’s model of solar manufacturing,” says Joanna Lewis, an associate professor in the energy and environment department at Georgetown University. “We should focus on the next generation of solar technologies being developed by U.S. innovators and be sure we have the structures in place to support initial demonstration and ultimately large-scale deployment.”

First Solar, the only U.S. manufacturer currently in the global top 10, is the most promising example so far of alternative solar technologies. First Solar’s panels are made out of thin film using cadmium telluride, instead of polysilicon, which makes the manufacturing process more straightforward and much more environmentally friendly. Since Chinese producers rely on coal to refine their polysilicon, a 2020 study found that solar panels produced in China are more than twice as carbon intensive as U.S.-produced cadmium telluride panels. First Solar says its water footprint is also three times lower than traditional crystalline silicon panels. 

First Solar recently secured a $500 million loan from the U.S. International Development Finance Corp., America’s new overseas development bank, to build a panel factory in India. Countering China is clearly on the agency’s agenda: it promoted the project as a way to “diversify supply chains” and an example of Build Back Better World, the U.S. alternative to China’s Belt and Road Initiative.

For First Solar, these kinds of government interventions, to include the tariffs, have been crucial to giving the company breathing room.

“We have operated for the last two decades under constant threat of state-backed Chinese solar manufacturing,” says Samantha Sloan, vice president of global policy, marketing and sales at First Solar. Sloan notes that First Solar’s technology has allowed them to succeed so far, but also says, “we need to have smart trade policy.”

The question for Biden — and anyone interested in seeing renewable energy adoption in the U.S. — is whether the U.S. government can afford to wait for homegrown companies to prove themselves. In order to generate electricity carbon-free by 2035 — the Biden administration’s goal — the amount of solar added to the grid annually needs to double through this decade, according to the Department of Energy’s recent modeling. Any further costs and trade actions could throw a wrench in that demanding schedule. 

“We need to get going on decarbonizing the U.S. energy sector,” says Jonas Nahm at Johns Hopkins. “At the end of the day, we don’t have much time left.”

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