By Nichola Groom
May 8 (Reuters) – Major solar companies, banks and insurers have stopped doing business with at least half a dozen recently built U.S. panel factories because of uncertainty about whether their ties to China will deprive them of clean energy subsidies, according to industry executives and documents reviewed by Reuters.
This shift, prompted by the Trump administration’s new policies, jeopardizes more than a third of US solar capacity in factories originally built by Chinese companies. Details of how policy uncertainty is driving installers and insurers away from U.S. solar factories with ties to China have not been previously reported.
The resulting effects dovetail with broader efforts by US President Donald Trump to block Chinese companies from the US market and cut government support for green energy. But industry experts say the policy could backfire by jeopardizing growth in U.S. manufacturing jobs and energy production at a time when utility bills are rising and demand for electricity from data centers serving the AI industry is increasing.
Sunrun, the largest residential solar installer in the United States, is among the companies now avoiding Chinese suppliers.
“It hinders financing of much-needed solar and storage projects,” said Keith Martin, an attorney at Norton Rose Fulbright who advises on renewable energy tax agreements.
The potentially far-reaching impacts on U.S. manufacturing underscore the difficulty of breaking away from China’s global dominance in renewable energy and green technologies, due in large part to heavy subsidies that Beijing gives to Chinese firms.
The global scope of China’s industrial policy creates a dilemma for U.S. regulators who want to block Chinese firms without endangering U.S. solar manufacturers that depend on Chinese equipment and technology to produce competitive and affordable products.
Without strong growth in domestic solar production, the United States has few options for expanding renewable energy beyond importing panels made by Chinese companies, which would lead to higher prices, U.S. executives say.
“This will undoubtedly continue to increase the cost of energy in the U.S.,” said Aaron Halimi, chief executive of Renewable Properties, which develops small-scale utility projects in San Francisco and has shifted most of its resources to Tempe, Ariz.-based, to avoid China-linked suppliers.
The new uncertainty in U.S. solar investments stems from provisions in the Trump-backed “Big, Beautiful Bill” that the Republican-controlled Congress passed in 2025.
The legislation cut Biden-era clean energy subsidies and restricted some foreign countries, including China, from securing what remained. The U.S. Treasury Department has not yet provided full guidance on how the law will be implemented, and a department spokesman declined to give a timeline for when that guidance would be released.
Trump wants to rapidly expand the US power grid to power American data centers. But energy industry experts say solar plants, combined with battery storage that kicks in when the sun isn’t available, are the fastest way to increase electricity production because they are easier to build than gas, coal or nuclear plants.
Trump has called renewable energy unreliable and expensive and has enacted policies that encourage the expansion of fossil fuel energy sources.
The White House did not respond to a request for comment.
A spokesman for China’s embassy in Washington criticized the US restrictions as discriminatory and said Beijing would defend its companies’ interests.
CHINESE SOLAR COMPANIES ARE SUITABLE – SOMEWAY
China controls about 80% of global solar equipment production, according to Wood Mackenzie. His companies, including LONGi, Trina and others, were among the fastest to build and operate U.S. factories when former President Joe Biden’s 2022 climate change law created tax credits for clean energy factories.
Since then, solar equipment manufacturers have announced nearly $43 billion in investments supporting a projected 48,000 jobs, according to the Solar Energy Industries Association.
Domestic production is now aligned with the US solar panel demand, eliminating the need to import panels. But that could change if a significant portion of U.S. factories caught in regulatory uncertainty are unable to compete.
The Trump-backed law restricts Chinese companies from owning a 25% stake in facilities seeking federal subsidies, imposes sourcing requirements and bans “effective control” of Chinese firms. Companies say subsidies, which include tax credits for solar production and installation, are vital to staying competitive.
Chinese companies have tried to comply by selling factory shares or otherwise restructuring. But most maintained financial ties to U.S. facilities, sometimes in the form of profit-sharing or supply agreements, according to a Reuters review of corporate disclosures.
Industry officials have questions about whether remaining connections disqualify plants from U.S. clean energy production credits. Without guidance from the Treasury Department, assemblers, including industry giant Sunrun, are staying away from these factories while banks and insurers are cutting financing and coverage.
WITHDRAWAL OF APPROVED SUPPLIERS
Sunrun distributed a shortened list of approved solar panel suppliers to installation partners in January, according to a document seen by Reuters.
The list included only non-Chinese manufacturers such as Qcells, REC, Silfab and Elin. It previously included Canadian Solar, JA Solar, Jinko, LONGi and Trina, all with China ties.
“We have taken a conservative stance and do not source equipment from manufacturers that would raise compliance concerns,” Sunrun Deputy Chief Financial Officer Patrick Jobin told Reuters.
Palmetto, a North Carolina-based company that sells rooftop solar panels, also steers clear of China-linked manufacturers despite compliance efforts, chief executive Sean Hayes said.
Meanwhile, banks including Morgan Stanley, JPMorgan and Goldman Sachs have reduced tax equity financing for some solar projects over concerns that future Treasury comments could retroactively invalidate tax credits.
Banks declined to comment.
Insurers have taken a tougher stance, refusing to insure companies against the risk of being barred from clean energy tax credits, according to Antony Joyce, a tax insurance expert at broker Marsh.
Peter Henderson, director of accounting firm Baker Tilly, stated that the Treasury’s expected guidance will be very important and said: “The companies that are in the best position at the moment are certainly those that do not have clear ownership ties to the country in question.”
The Solar Manufacturers Coalition for America, a trade group representing non-Chinese companies with U.S. factories including First Solar and Hanwha’s Qcells, called on the Treasury Department to take a tough stance.
‘THE CLEAREST WAY TO COMPLY’
The main issue driving companies away is that Chinese companies maintain ties with their factories rather than making an open break. The factories, originally built and operated by China-linked manufacturers, account for at least 25 gigawatts of the country’s approximately 66 GW of operating solar module production capacity.
“Very few Chinese manufacturers are completely exiting their U.S. factories,” said Elissa Pierce, an analyst at Wood Mackenzie.
China’s JinkoSolar, which operates a factory in Florida, announced Friday that it has agreed to sell a 75.1% stake in its U.S. subsidiary to private equity firm FH Capital, which is also an investor in South Carolina solar cell maker ES Foundry.
The Chinese parent company of Boviet Solar, which produces panels in North Carolina, said they are looking for outside investors.
Illuminate USA, a joint venture between China’s LONGi and Chicago-based Invenergy, has reduced the Chinese firm’s ownership stake in the Ohio plant, built in 2024, to less than 25% and renegotiated its intellectual property agreement with LONGi, according to an Invenergy source.
But Invenergy is uncertain about the future of the facility, which employs about 1,700 workers. Illuminate and LONGi did not comment.
In comments in March calling for clear guidance from the Internal Revenue Service, the company said: “The ongoing operations of Illuminate USA and other U.S. manufacturers remain at risk.”
(Reporting by Nichola Groom; editing by Richard Valdmanis, David Gaffen and Nick Zieminski)
