The Wall Street Journal reported Tuesday that new Chinese export rules could hamper U.S. efforts to strengthen its solar energy manufacturing supply chain.
According to the report, electronic components key in making solar technology like ingots and wafers are almost solely produced in China and could come under that country’s export restrictions, making it difficult to build a supply chain for the United States to make its own solar technology.
"China's proposed export restraints are exhibit A on the need to rapidly scale American solar manufacturing," Abigail Ross Hopper, president and CEO of the U.S. business lobby Solar Energy Industries Association, told the Journal.
The news from China, which provides about 80% of the vital electronic components needed to ramp up solar panel production, comes as U.S. companies are trying to expand into the manufacturing market and encouraging suppliers to increase production outside of that country, Chemical & Engineering News reported in September.
The article highlighted Wacker Chemie's chemical plant in Charleston, Tennessee, which produces polysilicon which is one of the vital ingredients in making the computer chips required in solar systems.
Site Leader Ken Collins told the publication that the company has already invested some $3 billion in the 220-hectare facility, which is still growing.
"We're actively looking at things in F," he said in the article, pointing to the location of a future street on the edge of the facility. "And then long term, it goes well beyond."
Its silicon polymer production addition also saw an infusion of $200 million to help the plant make the products needed to reduce demand for Chinese electronic products.
Making things more difficult, the report said, is that China also controls several steps in the overall solar supply chain, requiring other countries to step up production of other components to keep manufacturing online.
According to the report, the recently passed $738 billion Inflation Reduction Act’s clean energy pieces will kick-start the solar industry and boost production, enabling the U.S. to have factories in place that can make 50 GW solar panels, which could power every home in Texas, each year.
"Maybe half of that crosses the finish line," Collins said in the report. "That’s still a lot of polysilicon demand. Much more than the three producers in the U.S. make today."
While the new Chinese export rules appear to hurt U.S. production efforts, they do not seem to be taken as a punitive measure, but as a way for China to maintain its industry dominance, the Journal report said.
© 2023 Newsmax. All rights reserved.