Major solar companies, financial institutions, and insurance providers have ceased operations with approximately six recently constructed American solar panel manufacturing facilities due to concerns about their Chinese connections potentially making them ineligible for federal clean energy incentives, according to industry leaders and documentation examined by news outlets.
This development, sparked by recent Trump administration regulations, puts at risk over one-third of America’s solar manufacturing capacity housed in facilities originally established by Chinese corporations. The policy uncertainty is causing installers and insurers to distance themselves from American solar factories with Chinese ties.
These consequences align with President Donald Trump’s broader strategy to exclude Chinese businesses from American markets and reduce federal backing for renewable energy initiatives. However, industry analysts warn this approach could backfire by threatening expansion of American manufacturing employment and electricity production during a period of increasing utility costs and growing power demands from artificial intelligence data centers.
Among the companies now steering clear of Chinese suppliers is Sunrun, America’s top residential solar installation company.
“It’s holding up financings of desperately needed solar and storage projects,” said Keith Martin, an attorney at Norton Rose Fulbright who advises on renewable energy tax deals.
The potentially widespread impacts on American manufacturing highlight the challenges of separating from China’s worldwide control of renewable energy and green technology sectors, largely fueled by Beijing’s substantial subsidies for Chinese businesses.
China’s expansive industrial strategy creates a challenge for American regulators seeking to exclude Chinese companies while protecting U.S. solar manufacturers who rely on Chinese equipment and technology to create competitive and cost-effective products.
Without strong expansion in domestic solar manufacturing, America has limited alternatives for growing renewable power beyond purchasing panels manufactured by Chinese companies, which will result in increased costs, according to U.S. industry leaders.
“This is undoubtedly going to continue to increase the cost of power in the United States,” said Aaron Halimi, chief executive of Renewable Properties, a San Francisco developer of small-scale utility projects that has shifted most of its sourcing to Tempe, Arizona-based First Solar to avoid suppliers with China links.
The new uncertainty surrounding American solar investments originates from sections within the Trump-supported “One Big Beautiful Bill” that the Republican-led Congress approved in 2025.
This legislation reduced Biden-era clean energy subsidies and limited certain foreign nations, including China, from obtaining remaining incentives. The U.S. Treasury Department has not yet issued complete guidance on implementation, and a department representative declined to provide a timeline for when such guidance would be released.
Trump aims to rapidly expand America’s electrical grid to power domestic data centers. However, power industry specialists say solar installations, paired with battery storage that activates when sunlight is unavailable, represent the fastest method to increase electricity generation because they’re simpler to construct than gas, coal, or nuclear facilities.
Trump has described renewable energy as unreliable and costly while implementing policies encouraging expansion of fossil fuel power sources.
The White House did not respond to requests for comment.
A representative for China’s embassy in Washington criticized the American restrictions as discriminatory and stated Beijing would protect its companies’ interests.
China maintains approximately 80% control of global solar equipment manufacturing, according to Wood Mackenzie. Chinese companies, including LONGi, Trina, and others, were among the fastest to construct and operate American factories when former President Joe Biden’s 2022 climate legislation established tax credits for clean energy manufacturing facilities.
Since that time, solar equipment manufacturers have announced nearly $43 billion in investments supporting a projected 48,000 jobs, according to the Solar Energy Industries Association.
Domestic manufacturing now matches American demand for solar panels, eliminating requirements for panel imports. However, this could shift if a substantial portion of U.S. factories caught in regulatory uncertainty cannot compete effectively.
The Trump-backed legislation limits Chinese companies to 25% ownership stakes in facilities seeking federal subsidies, establishes sourcing requirements, and prohibits “effective control” by Chinese firms. Companies indicate these subsidies, including tax credits for solar manufacturing and installation, are essential for maintaining competitiveness.
Chinese companies have attempted compliance by selling factory stakes or restructuring operations. However, most have maintained financial connections to their American facilities, sometimes through profit-sharing or supply agreements, according to corporate disclosure reviews.
Industry officials question whether these remaining connections disqualify factories from American clean energy manufacturing credits. Without Treasury Department guidance, installers including industry giant Sunrun are avoiding these factories, while banks and insurers withhold financing and coverage.
Sunrun distributed a reduced list of approved solar panel suppliers to installation partners in January, according to documentation reviewed. The list included only non-Chinese manufacturers such as Qcells, REC, Silfab and Elin. Previously, it had included Canadian Solar, JA Solar, Jinko, LONGi and Trina – all with Chinese connections.
“We have taken a conservative stance and do not procure equipment from manufacturers that would raise compliance concerns,” Sunrun Deputy Chief Financial Officer Patrick Jobin said in a statement.
Palmetto, a North Carolina-based rooftop solar panel company, is also avoiding China-linked producers despite their compliance efforts, according to general manager Sean Hayes.
Meanwhile, banks including Morgan Stanley, JPMorgan and Goldman Sachs have reduced tax-equity financing for certain solar projects due to concerns that future Treasury interpretations could retroactively invalidate tax credits, according to three people familiar with the deals who requested anonymity.
The banks declined to provide comments.
Insurance companies have adopted stricter positions, refusing to insure companies against risks of being barred from clean energy tax credits, according to Antony Joyce, a tax insurance specialist at broker Marsh.
“The companies that are best positioned right now are certainly the ones that didn’t have clear ownership ties to a country of concern,” said Peter Henderson, a principal at accounting firm Baker Tilly, who emphasized Treasury’s expected guidance will be crucial.
The Solar Energy Manufacturers for America Coalition, a trade group representing non-Chinese companies with American factories, including First Solar and Hanwha’s Qcells, has encouraged the Treasury Department to adopt a strict position.
The central issue driving companies away is that Chinese businesses are maintaining connections with their factories rather than making complete separations. Facilities originally constructed and operated by China-linked producers represent at least 25 gigawatts of the nation’s approximately 66 GW of operating solar module manufacturing capacity.
“Very few Chinese manufacturers are actually decoupling themselves from their U.S. factories entirely,” said Elissa Pierce, an analyst at Wood Mackenzie.
China’s JinkoSolar, which operates a Florida facility, and the Chinese parent company of Boviet Solar, which produces panels in North Carolina, have indicated they are seeking outside investors.
Illuminate USA, a joint venture between China’s LONGi and Chicago-based Invenergy, reduced the Chinese company’s ownership stake in an Ohio plant built in 2024 to below 25% and renegotiated its intellectual property agreement with LONGi, according to an Invenergy source.
However, Invenergy remains uncertain if the plant, which employs approximately 1,700 workers, will survive. Illuminate and LONGi did not provide comments.
In March comments to the Internal Revenue Service requesting clear guidance, the company stated: “The continued operation of Illuminate USA and other U.S. manufacturers remains at risk.”
