Chinese solar companies shrink US footprint as Trump cuts incentives

Originally published on Nikkei Asia (July 16, 2025)

NEW YORK -- Chinese solar companies are retreating from the U.S. as the Trump administration's massive tax-and-spending act ends incentives for projects tied to China.

Two leading manufacturers, JA Solar and Trina Solar, have sold panel factories in the past seven months and other Chinese companies are assessing their presence in the world's second-largest energy consumer.

The sales came in anticipation of President Donald Trump's One Big Beautiful Bill Act, which was signed into law this month and bars Chinese-owned entities from receiving tax credits that incentivize onshoring production of clean energy technology.

The bill bars foreign entities of concern -- a term that includes companies with at least 25% Chinese ownership or an aggregate of 40% by one or more Chinese shareholders -- from receiving tax credits.

"It's a huge blow for a lot of folks," said an executive at a Chinese renewable company, who requested anonymity. "It's going to change a lot of the economics, and the project might not make economic sense."

JA Solar sold its panel production facility to U.S. company Corning in April, according to people familiar with the matter and company filings.

The 2-gigawatt, $60 million factory in Phoenix, Arizona, began commercial operations last year in a move JA Solar took to avoid high U.S. tariffs on Chinese solar imports.

Corning, which has ramped up solar manufacturing efforts, bought the factory for more than $225 million, according to company filings. Its subsidiary, Hemlock Semiconductor, produces raw materials for solar silicon wafers and polysilicon in Michigan.

Corning confirmed the recent transaction but declined to share details.

"Corning is excited to leverage our advanced manufacturing expertise and expand our solar capabilities in Phoenix, Arizona, with American Panel Solutions," said AB Ghosh, Corning vice president and general manager of solar and CEO of Hemlock Semiconductor, in an email statement.

It is unclear if the deal involved licensing agreements or commercial partnerships. In March, Corning signed a deal with U.S. manufacturers Suniva and Heliene to produce all-American-made solar components.

JA Solar did not respond to multiple requests for comment.

Jiangsu-based Trina Solar, meanwhile, sold its 125,000-square-meter solar module facility in December to Texas-based T1 Energy. Under the deal for the 5-gigawatt factory, Trina will receive a 9.9% equity stake in the U.S. company and commercial agreements including an annual fee.

Other Chinese projects include a 5-gigawatt solar panel factory in Ohio owned by Illuminate USA, a joint venture between Longi, with 49% equity ownership, and U.S. company Invenergy, which owns the rest.

Several Chinese solar executives say the tax-and-spending act has made manufacturing on American soil much more uncertain.

"We are trying to figure out if we need to restructure or sell our assets," said one sales manager.

Vietnam-based Boviet Solar, a subsidiary of Chinese conglomerate Boway Group, said it is reviewing its corporate and operational structures to comply with any U.S. regulations.

Despite the Trump administration's pivot away from renewables, however, sources say the U.S. remains a strong market due to growing demand for power to feed the artificial intelligence boom.

The market also promised better profit margins than many could find at home.

China's solar industry grew rapidly on the back of heavy government subsidies, but overproduction led prices to plunge, wiping out profits for many companies. JA Solar lost 1.6 billion yuan ($223 million) in the first three months this year.

Chinese companies began to look overseas to sell excess solar panels, flooding the U.S. with cheap imports, including panels shipped from Southeast Asia. Washington responded with levies as high as 3,500% in April.

Chinese panel makers began setting up facilities in the U.S. on the back of the Biden administration's 2022 Inflation Reduction Act's manufacturing tax credits, bringing knowledge and skills with them.

But critics said Chinese companies should not be subsidized by American taxpayers, and national security concerns over solar components sourced from China were raised by politicians.

The administration says barring Chinese companies from tax credits will protect America's solar manufacturing industry from relying on Beijing-controlled supply chains. The bill also bars projects that receive "material assistance" from a foreign entity of concern from receiving tax credits. Material assistance is determined using a government calculation and can include technology licenses, components and payments.

Critics of Trump's tax bill worry such restrictions go too far and will end up hurting clean energy development in the U.S

China, for example, currently produces 96% of the world's polysilicon, a key material in solar panel parts.

"While FEOC [foreign entity of concern] restrictions can help secure global supply chains and boost U.S. manufacturing, they can also have the opposite effect of freezing investment in U.S. manufacturing and energy production while ceding competitive ground to China," the think tank Bipartisan Policy Group wrote in a brief.

Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, was similarly critical, saying the act, which also phases out investment tax credits after 2026, will lead to a flood of Chinese imports as onshoring domestic manufacturing becomes disincentivized.

"It will upset existing contracts for products from domestic factories opening up in the next few months and jeopardize billions in factory investments and thousands of jobs, conceding an important market to heavily subsidized Chinese products," Carr said.