U.S. Senators introduce legislation to prevent Chinese companies from getting IRA dollars

A group of bipartisan U.S. Senators introduced legislation today that would block taxpayer money from going to Chinese solar and clean energy companies.

Sens. Sherrod Brown (D-OH), Bill Cassidy (R-LA), Jon Ossoff (D-GA) and Rick Scott (R-FL)  introduced the “American Tax Dollars for American Solar Manufacturing Act” to prevent taxpayer dollars, including funds from the Inflation Reduction Act, from going to Chinese-controlled companies.

“We cannot allow American tax dollars to go to Chinese companies that cheat and undermine American solar manufacturing. Our bipartisan bill will make sure that only American companies are supported by taxpayer dollars, and support the creation of manufacturing jobs throughout the solar supply chain across Ohio,” said Brown. “We will not allow the Chinese government to take down the American solar manufacturing industry.”

The bill is supported by First Solar, which has manufacturing locations in Sen. Brown’s represented state of Ohio and Cassidy’s represented state of Louisiana. CEO Mark Widmar released a comment criticizing crystalline silicon solar panel assemblers in the United States.

“It is imperative that the U.S. solar manufacturing industry, which should not be confused with companies simply assembling modules in the U.S. with high-value-add imported components, is granted a level playing field allowing it to compete on its own merits,” said Mark Widmar, chief executive officer of First Solar.

The legislation would ensure that only American manufacturers with a “genuine domestic supply chain” benefit from tax credits intended to strengthen American energy independence by building out the supply chain for solar, wind, critical mineral, and battery projects. The legislation would prevent any company with ties to a “Foreign Entity of Concern” from receiving the 45X Advanced Manufacturing Tax Credit. These restrictions are based on the same Foreign Entity of Concern rules that became law as part of the Bipartisan Infrastructure Law in 2021.

“This bipartisan legislation will ensure Chinese-owned or -headquartered solar companies do not have access to U.S. incentives while they receive massive market-distorting subsidies in China, including on many of the components they are building into end products in the U.S. Domestic production of these fundamental components, particularly wafers and polysilicon, is critical to building a robust U.S. solar supply chain,” said Mike Carr, Executive Director of the Solar Energy Manufacturers for America (SEMA) Coalition.

This proposed legislation generally follows the trend of Senators and industry representatives encouraging the Treasury Dept. to require American-made wafers in order for solar panels to qualify for “domestic content” bonus incentives. They argue that only with domestic wafer production can the United States break China’s dominance on the solar supply chain. They also suggest that prohibiting Chinese solar companies from receiving manufacturing credits would boost American production of wafers — of which there is currently no domestic production.

The companies that would benefit from this legislation include First Solar (which makes thin-film solar panels and therefore does not rely on silicon wafers) and Qcells (which will likely be the first company in the United States to manufacture its own wafers). Qcells, a Korean-backed company, has a large manufacturing footprint in Georgia, which is Sen. Ossoff’s represented state.

See SPW’s list of U.S. solar manufacturers here.