By Mark Widmar
September 28, 2021 at 5:00 am ET
The past year has seen the American solar industry contend with human rights abuses in its Chinese supply chain, volatile shipping and polysilicon costs, suppliers reneging on contracts and looming trade issues coupled with increasingly antagonistic geopolitics.
The common thread that runs through these challenges is a reliance on China’s vast, state-subsidized solar manufacturing complex. Although it benefits from free-market economies, China isn’t one, and its companies have no choice but to toe the Chinese Communist Party’s line on critical issues. This inherent truth makes it impossible to decouple a fight against climate change powered by Chinese-supplied technology from CCP policies and, by extension, human rights, environmental, trade, and political risks.
Fortunately, this is not the so-called “trolley problem” where we have no option but to choose a lesser evil. We do not have to choose between fighting climate change and defending human rights — or, for that matter, our nation’s energy independence and security.
Instead, there is an elegantly simple legislative solution free of ethical or political dilemmas, which allows us to do what’s best for our country without hampering the climate fight. Our country can feasibly source 45 percent of its electricity from solar by 2050 while also safeguarding energy security, critical supply chains and geopolitical objectives. Done right, we can fight climate change without compromising American interests and principles.
China’s solar dominance stems from a decision to identify photovoltaic supply chains as a strategic resource. Its government built out a monopoly-enabling industrial strategy complete with heavy subsidies, cheap coal electricity and a comprehensive supply chain, all with no apparent regard for the cost or World Trade Organization rules. These actions stacked the deck against U.S., European and Indian solar manufacturers, decimating them and creating artificial dependencies on China’s solar industry.
We can effectively and rapidly counter this by building our own solar industrial strategy, albeit one that is values- and rules-based.
This strategy must have bipartisan political support because it must endure. It must be fair, fiscally disciplined, environmentally and socially responsible and avoid the risk of running afoul of trade rules. It must be a strategy built with a goal of self-reliance and leveling the playing field for manufacturers and innovators seeking to compete on their merits. And it must enable the resiliencies of allied nations, many of which face similar threats to their energy security and cleantech supply chains.
We already have the technology and innovation needed for the basis of that strategy. What we need now is for Congress to lean in and pass legislation that will help secure critical clean energy supply chains, drive down solar deployment costs and create good-paying middle-class jobs. Legislation that directly enables self-sufficiency and energy security.
Legislation such as the Solar Energy Manufacturing for America Act, introduced by Sen. Jon Ossoff (D-Ga.), calls for a durable and long-term domestic solar manufacturing supply chain tax credit. This comprehensive approach to rebuilding America’s solar manufacturing capabilities is not only popular with voters, it is more sustainable than imposing and renewing safeguard tariffs.
What’s more, it can also be supplemented with 48C manufacturing tax credits or other upfront tax or financial incentives to effectively and rapidly achieve scale and steer investment to vulnerable communities such as traditional coal mining towns. Importantly, it could do so without breaking the same trade rules China stands accused of flouting.
It’s hard not to recognize the benefit of scaling domestic solar supply chains here at home.
Our company, First Solar, is building its third factory in Ohio, representing an investment of almost $700 million and over 700 new manufacturing jobs while supporting several thousand more across our US supply chain. As a result, we are effectively doubling our US capacity in approximately 18 months, putting us in a position to produce over 6 gigawatts of solar panels annually by 2023. These are American-made solar panels untainted by forced labor in Xinjiang, produced onshore and without crystalline silicon and, therefore, without the risks and costs of shipping and polysilicon price volatility.
Crucially, we are not done expanding, and, fortunately, we are not alone. Many of our competitors have indicated that they would be willing to expand if the right policies are in place. We, as an industry, are willing to step up.
Imagine if the United States could fight climate change while rebuilding a diverse solar manufacturing sector, creating thousands of middle-class jobs, rejuvenating the cycles of innovation that cleantech desperately needs and safeguarding its energy independence and security. That is the promise of a strong solar industrial policy. And that is what America needs at this moment.
Mark Widmar is the CEO of First Solar, the only U.S. company among the world’s largest solar manufacturers.
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