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I am Mike Carr – the Executive Director of the Solar Energy Manufacturers for America Coalition, or the “SEMA Coalition”.
We are a group of major non-Chinese headquartered solar manufacturers committed to restoring a competitive, environmentally friendly, and socially responsible U.S. solar supply chain.
We see a geopolitical imperative in ensuring that a cartel of state-backed Chinese-headquartered firms do not dominate this sector, as they do today. We cannot allow China to continue to use supply chain control of this critical energy technology as leverage.Effective trade policy, including robust trade enforcement, is a key tool to ensure a level playing field for U.S. solar manufacturers.
We are encouraged by the Administration’s recent actions ontrade and overcapacity.As President Biden stated last week – “the Chinese government is subsidizing excess capacity.They’re flooding the market.”Secretary Raimondo underscored – “we know the PRC’s playbook – we’ve seen their non-market actions on solar and steel – and cannot allow China to undermine U.S. supply chains by flooding the market with artificially cheap products that hurt American businesses and workers.”
Notably, Ambassador Tai reiterated the Administration's intention to “reestablish American leadership” in solar at her recent Senate hearing last month. We are grateful for USTR’s recent actions to close the 201 bifacial loophole and 301 actions where USTR deemed solar manufacturing strategically important.
Solar deployment is accelerating across America and provided nearly half of all new domestic generating capacity in 2023 – more than any other energy source. Solar has the potential to provide 40 percent of the nation’s electricity by 2035.
Following the IRA, 34,000 jobs were announced in solar manufacturing, with large facilities in places such as Arizona, Georgia, Michigan, and Ohio. These facilities are the economic engines of their communities and those jobs and investments should be supported.
There is no fundamental comparative advantage others hold over the U.S. in solar manufacturing. We have the materials and ingenuity needed to be cost competitive and manufacture at scale – our manufacturers just need the level playing field to get there.
I want to underscore the importance of reshoring the capital-intensive wafer and polysilicon segments of the industry which shifted predominantly overseas to China over the last decade. State backed chinese-headquartered wafer companies are effectively a cartel, incontrol of both supply and price for this fundamental component. China today produces more than 90 percent of solar-grade polysilicon, controls more than 99 percent of the global wafering capacity, and controls upwards of 95 percent of global shipments across the solar supply chain.This product flows through Chinese-headquartered companies in Southeast Asia where it is exported to the US.
The U.S. should not rely on a handful of foreign companies to meet a significant portion of our electricity needs. Nor should we continue to face the scenario where China uses solar exports as a leverage point as we look to meet the Administration’s greenhouse gas targets and energy security goals through solar deployment.
China has repeatedly shown its willingness to cut U.S. manufacturers off from parts of supply chains it dominates or to increase prices in retaliation for trade conflicts.
This is only a sampling of past actions. We have no reason to think a change in strategy is forthcoming.
Chinese manufacturers benefit from lax environmental and labor standards, and direct and indirect subsidies in everything from below market debt to electricity to land. This is NOT ‘accidental’ or market driven excess capacity within our borders. China is an export-led economy. Full stop. Their policy framework is to export, regardless of market conditions, leaving other countries' manufacturers, who obey the laws of their countries and the marketplace, at a serious disadvantage. They are engaged in a race to the bottom and a race to the bottom hasno winners.
A whole-of-government approach will continually be needed to address the totality of these anti-competitive tactics.
Trade and investment policy tools at USTR’s disposal to secure a resilient solar manufacturing supply chain in the U.S. include:
The effective use of trade enforcement tools does NOT reduce solar deployment or result in an increase in the cost of modules in the near-term.
In fact, annual solar deployment has increased sixfold during the past decade – a period with numerous solar trade enforcement actions.
The cost of solar modules is no longer a significant component of solar project pricing. The major cost drivers of solar projects are the cost of capital, customer acquisition costs, overhead, permitting, inspection, and interconnection costs. A robust domestic solar industry has and will continue to drive down costs through process innovation and technology improvements.
We appreciate this administration’s worker-focused agenda and encourage USTR to continue toseek diverse stakeholder input to set regulations and enforcement methods that will have the greatest impact on on shoring a complete and resilient solar supply chain.
We look forward to working with you on this. Thank you again for your time.
