Tariffs are changing the global solar market. An Ohio company played a role
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Inside a factory owned by Ohio-founded First Solar, machine techs monitor screens as glass panels are sanded down, coated with a thin layer of cadmium telluride and tested. Automated machinery manipulates the panels in a maze of conveyor belts inside the massive warehouse. And while the factory looks like First Solar’s Perrysburg factory in Northwest Ohio, it is in fact near-replica located in Ho Chi Minh City, Vietnam.
Each day, the plant ships out about 50 shipping containers of panels to the US, according to a staff member at the facility. This factory is one of dozens of solar plants in Southeast Asia – 80% of solar imports to the US come from the region.
But late last month, the Department of Commerce set new preliminary duties on some solar panels made in the region, following an April petition filed by a group of manufacturers including First Solar. One of the top solar manufacturers in the US, First Solar is a major player in advocating for tariffs on solar products made outside the country.
“With these preliminary duties, we are moving closer to addressing years of harmful unfair trade and protecting billions of dollars of investment in new American solar manufacturing and supply chains,” said Tim Brightbill, partner at Wiley Rein and lead counsel to the petitioners, in a statement.
The new solar tariffs are the latest in a series of tightening trade restrictions supported by First Solar, with impacts on manufacturing abroad and here at home.
A game of tariff Whac-A-Mole
While the vast majority of solar imports to the US these days come from Southeast Asia, that was not always the case. China was the biggest source of those imports 15 years ago. In 2012, the Obama administration imposed duties on Chinese solar manufacturers, which were meant to level the playing field between domestic manufacturers and foreign companies with competitive advantages such as subsidies from their home governments.
Manufacturers subsequently shifted to Taiwan, and the duties followed them there in 2015. Chinese companies then moved production again to Southeast Asia. In 2022, that led the Commerce Department to investigate whether those companies had skirted US tariffs, by allegedly shipping nearly completed panels from China to Vietnam, Malaysia, Thailand and Cambodia for minor final adjustments in order to avoid tariffs.
This year, First Solar, with a number of other manufacturers, filed a new petition alleging that imports from these four Southeast Asian countries were harming the American solar industry, like the manufacturing happening in Perrysburg. The US Department of Commerce ruled in their favor.
First Solar at first agreed to be interviewed for this story but later declined following President Donald Trump's victory.
“There is a lot the company is trying to sift through right now coming out of the elections, so we are proceeding cautiously with our public and media engagement until we have a clearer sense of the landscape going forward,” said John Kyte of Kyte Consulting, a communications firm whose client is First Solar, in an email to The Ohio Newsroom.
An industry split over tariffs
First Solar is not a major player globally, but it is one of the largest American solar manufacturers. With three factories in Wood County and 2,400 Ohio employees in 2023, its operations in the state constitute the largest solar manufacturing footprint in the Western Hemisphere, according to the company. The tariffs stand to boost American manufacturers like First Solar, and its ability to hire workers in Ohio and across the US.
“First solar is having a fantastic time. The trade tariffs have always benefitted First Solar, and that is definitely why First Solar has supported them,” said Jenny Chase, lead solar analyst at BloombergNEF.
While the company has factories in Vietnam and Malaysia, the tariffs on the four Southeast Asian countries do not apply to First Solar because the company produces thin film cadmium telluride solar cells, a different technology distinct from the crystalline silicon cells that dominate the industry.
“Purely from an external policy perspective, I can see why the US wants to make First Solar its champion, because of having a different technology route,” Chase said. “Diversity is strength.”
But solar installation companies and green energy advocates, however, argue that the tariffs increase costs not just for consumers but for other parts of the industry and ultimately slow the adoption of solar in the US.
“That is the tension in the US context: What's good for installers is not necessarily good for manufacturers and vice versa,” said Quill Robinson, assistant director and associate fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies.
The Biden administration’s simultaneous goals to revitalize American manufacturing, reduce the country’s reliance on China, and decarbonize have proven difficult to accomplish all at once, according to Robinson.
A 2022 study published in Nature found that the globalized solar supply chain massively reduced the costs of solar panels from 2008 to 2020, with installers saving $24 billion in the US. The researchers estimated that a reduction in international supply chains, due to protectionist trade policies such as tariffs, could make solar panels up to 30% more expensive by 2030.
“From a climate perspective, terrible outcome,” said Jonas Nahm, associate professor at the Johns Hopkins School of Advanced International Studies, regarding US consumers paying much higher prices for panels produced domestically. “Because you're looking at the Europeans paying one-third of what we pay for solar and they are installing at a much faster clip at much more affordable prices.”
But if last month’s Department of Commerce decision is any indication, the federal government is standing behind the tariffs.
This is the first story in a three-part series about the impact of solar tariffs on manufacturing overseas and in Ohio. Tomorrow’s story will examine how foreign companies are adapting to the increased tariffs and what that could mean for Ohio manufacturing.
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