BEIJING: Renewable energy manufacturer Jinko Solar Co’s recent decision to sell control of its Florida facility extends a multi-billion dollar retreat from the United States by China’s clean technology firms, as they contend with an increasingly hostile policy environment and the potential loss of Biden-era incentives.
China-based companies in the sector scrapped about US$2.8bil in planned US manufacturing projects last year, according to Rhodium Group.
As of end-March, more than half of proposed Chinese clean-tech investments in the US announced since 2022 had been cancelled, paused or delayed, according to the group’s calculations.
That’s part of a broader downturn that saw a 17% decline last year in all clean technology investment in the United States, Rhodium said in a report.
Producers of solar equipment, batteries and electric vehicle technology have experienced a sharp reversal since Biden-era tax credits lured Chinese companies to announce US$5.6bil of investments in 2023 alone.
Since then, US President Donald Trump’s administration has rolled back incentives and, most crucially, last year’s tax bill introduced new hurdles for manufacturers with ties to so-called foreign entities of concern.
“Jinko’s decision underscores the enormous challenges facing Chinese clean-tech firms operating in the United States,” said Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute.
The company’s move should be seen as “a chilling message to anyone that wishes to come and build factories in the United States”, he said.
Shanghai-based Jinko had agreed to sell about a 75% stake in its solar panel facility in Florida to FH Capital, a private equity fund.
The main purpose of selling the stake is “to optimise its overseas asset allocation, ensure its long-term strategic layout in the United States, enhance flexibility and compliance, and facilitate its long-term development”, a Jinko spokesperson said.
The decision was prompted by a need to comply with “US domestic manufacturing regulations” and to “minimise operational risks”, Jinko said in a corporate filing.
Jinko’s sell-down follows similar moves by China-based competitors to scale back exposure to the United States or to exit.
Trina Solar Co sold a majority stake in its Texas assembly facility in 2024, and last year Corning Inc acquired a JA Solar Technology Co plant in Arizona.
Shanghai-listed Ningbo Boway Alloy Material Co said on Wednesday it will sell solar manufacturing assets in the United States to India’s INOXGFL Group due to the tightening of foreign entity requirements under Trump’s tax bill.
Policy changes under Trump’s One Big Beautiful Bill Act mean it has become harder, if not completely impossible, for factories controlled by Chinese companies, or heavily reliant on China-dominated supply chains, to be eligible for lucrative manufacturing tax credits.
Losing access to those credits puts Chinese-owned factories at a “huge disadvantage” compared with domestic rivals, said Rob Barnett, a senior analyst at Bloomberg Intelligence.
Arizona-based First Solar Inc, the largest US solar producer, for example, told investors that it expects to receive more than US$2bil in credits this year.
While Treasury Department guidance on specific ownership thresholds for tax credit eligibility isn’t expected to be issued until later this year, analysts expect them to be difficult for China-linked firms to meet.
“The policy environment is getting restrictive,” said Margaret Jackson, a senior associate at the Centre for Strategic and International Studies and previously a senior counsellor for policy Department of Commerce during Biden’s tenure. — Bloomberg
