According to Bloomberg, on May 17, U.S. solar panel manufacturer First Solar surpassed Sungrow in market value, becoming the highest-valued solar company globally. As of May 24, First Solar’s market value was approximately $26.7 billion (about 193.7 billion yuan), with Sungrow at 150.2 billion yuan and LONGi Green Energy at 142.2 billion yuan, marking the first time since 2018 that a U.S. solar company has topped the global solar company market value rankings.
U.S. Trade Protectionism Boosts First Solar
Amidst claims of declining competitiveness of Chinese solar companies, the rise in First Solar’s market value is largely attributed to U.S. trade protectionism, including tariffs on Chinese imports and subsidies for domestic manufacturers.
Chinese solar companies are not afraid of competition. The highly market-driven nature of the solar industry favors development through market mechanisms, a key reason why China’s solar industry continues to lead globally. Chinese companies remain vital to the global solar market and are committed to fair trade relations and contributing to global green development.
Aggressive U.S. Policies Push for Domestic Manufacturing
Bloomberg noted that the recent surge in First Solar’s market value is linked to U.S. accusations of Chinese solar industry overcapacity and higher tariffs on Chinese solar products. On May 22, the U.S. Trade Representative announced significant tariff increases on Chinese imports, effective August 1. Further, the White House announced the end of the 201 tariff exemption for imported bifacial solar panels, and the Commerce Department initiated anti-dumping and anti-subsidy investigations on imports from Cambodia, Malaysia, Thailand, and Vietnam.
Liu Yiyang, deputy secretary-general of the China Photovoltaic Industry Association, pointed out that these measures could impact Chinese companies’ exports from Southeast Asia, benefiting U.S. manufacturers in the short term. However, he noted the overall rising U.S. stock market, suggesting that the increase in market value for U.S. companies like First Solar is also influenced by broader market trends.
High Dependence on Government Support
Liu Yiyang emphasized that First Solar, which uses thin-film technology with lower conversion rates compared to crystalline silicon, benefits significantly from U.S. government protection and subsidies, likening it to a “hothouse flower.” The U.S. Treasury’s guidelines under the Inflation Reduction Act provide substantial subsidies for solar products with high domestic manufacturing content. In 2023, First Solar’s net profit of $831 million included $660 million in subsidies, constituting over 80% of its profits.
Chinese solar expert Lü Jinbiao highlighted that First Solar’s production costs are double those of Chinese crystalline silicon panels. Without U.S. government subsidies and tariffs blocking Chinese competition, First Solar’s perceived competitiveness would diminish significantly.
Ignoring Climate Cooperation to Protect Inferior Capacity
Bloomberg reported that market value is just one aspect of a company’s worth. In terms of producing sufficient clean energy to combat climate change, First Solar still lags behind Chinese companies. Liu Yiyang provided data showing China’s dominance in the global solar supply chain, producing over 80% of key components and leading in technology innovation, breaking world records 62 times since 2014.
The International Energy Agency’s May report indicated rapid investment growth in China’s solar manufacturing sector, with China being the lowest-cost region for solar product manufacturing. In contrast, First Solar’s capacity and efficiency lag behind, with its Series 7 modules achieving 19.7% efficiency compared to over 23% for Chinese n-type crystalline silicon modules, which are also cheaper.
Unfair Trade Practices Hurt Global Cooperation
CNN noted that the U.S. government’s new tariff policies have been criticized for ultimately harming U.S. consumers and businesses. Higher tariffs have been shown to increase costs, largely borne by American entities, not Chinese exporters.
The International Energy Agency warned that the U.S. faces significant capacity shortfalls, jeopardizing its climate goals. Measures to restrict imports could disrupt investments and hinder the U.S.’s energy transition commitments.
China’s Green Contributions and Global Leadership
Ma Xue, deputy researcher at the Institute of American Studies, China Institutes of Contemporary International Relations, argued that the Biden administration’s tariff review, culminating near the 2024 election, is politically motivated to garner support. However, the underlying aim is to suppress China’s burgeoning green energy sector.
Lü Jinbiao noted that Chinese companies lead globally in technology, scale, and supply chain integration, despite challenges in the U.S. market due to government intervention. China continues to dominate the global supply chain, addressing global energy needs and supporting carbon reduction.
Liu Yiyang criticized the over-politicization of the Inflation Reduction Act, viewing it as protectionist and contrary to free trade principles. He urged continued investment in R&D, quality improvement, and international cooperation to counteract unfair trade practices and support global solar industry development.
To address these challenges, China must enhance R&D investment, improve product quality, and strengthen industry guidance domestically. Internationally, it should align with global green standards and explore emerging market opportunities, staying proactive in responding to policy changes