Solar companies in the US encounter steeper challenges despite victories in the budget bill
The One Big Beautiful Bill Act, recently signed into law, is expected to bring about changes in the clean energy manufacturing sector. The legislation introduces "foreign entity of concern" (FEOC) restrictions, a new bureaucratic regime that polices companies' corporate or supply-chain ties to China.
Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, suggests that these FEOC measures make investments in solar manufacturing more challenging. The American solar manufacturing industry has seen a decline since President Donald Trump resumed office, and the new restrictions may further exacerbate this trend.
Despite the uncertainties, companies like First Solar, Canadian Solar, Qcells, Enphase, and LESSO are actively reviving solar module production in the U.S. First Solar, notably, is expanding production facilities, while other firms are maintaining significant manufacturing capacities and innovations. T1 Energy, a U.S.-based solar manufacturer, is currently producing 12,000 solar modules a day and is on track for up to 3 gigawatts produced this year.
T1 Energy, now operating under the control of a U.S.-based firm traded on the New York Stock Exchange, even purchased a factory built by Chinese giant Trina Solar in December. However, the future of clean energy manufacturing in the U.S. remains uncertain, with the tax credits for clean energy manufacturers still accessible for a few years but their future after that being unclear.
The law eliminates solar and wind deployment credits after 2027, which could lead to a shrinking market for American manufacturers. This, coupled with the FEOC restrictions, may discourage companies from committing to building new solar factories in the U.S., potentially leading to a shift in solar manufacturing jobs and economic dynamism outside of the country.
Not all voices in the industry share the same concerns, though. Russell Gold, the executive vice president for strategic communications at T1 Energy, supports the FEOC measures in the new law. Dean Solon, a billionaire solar entrepreneur, expressed no concern about the new FEOC rules.
The manufacturing tax credit, which pays a company for each unit of key clean-energy components, has been preserved in the new law. This could provide some relief to companies looking to invest in clean energy manufacturing despite the challenges posed by the FEOC restrictions.
The U.S. is projected to install 57% to 62% less clean energy from 2025 to 2035 due to the new law. This reduction in clean energy installations could have far-reaching implications for the environment and the U.S. economy as a whole.
In conclusion, the One Big Beautiful Bill Act is expected to bring about significant changes in the clean energy manufacturing sector in the U.S. While some companies are still investing in solar manufacturing, the FEOC restrictions and the elimination of deployment credits after 2027 could discourage new investment and lead to a shift in solar manufacturing jobs and economic dynamism outside of the U.S. The future of clean energy manufacturing in the U.S. remains uncertain, but the manufacturing tax credit could provide some relief to companies looking to invest in this sector.
