A shadow hangs over the promise of American green energy. Two North American solar companies, once hailed as champions of a sustainable future, are now facing intense scrutiny regarding their deep and complex ties to China.
The Inflation Reduction Act, championed by Senate Democrats in 2023, aimed to bolster domestic “green” energy production. But a closer look reveals that substantial investments flowed to companies with significant assets and leadership rooted in China, raising questions about the true beneficiaries of these funds.
Canadian Solar, an Ontario-based firm founded by Chinese entrepreneur Qu Xiaohua, quickly became a poster child for the IRA’s success. A $250 million investment in a Texas facility was touted as a major win for American manufacturing, even earning praise from a Chinese state-run media outlet.
The company’s stock surged 34% in the first half of 2022, with CEO Shawn Qu expressing excitement over the IRA’s potential. This enthusiasm stemmed from the prospect of accessing roughly $370 billion in subsidies designed to incentivize domestic energy production.
However, internal company filings reveal a stark reality. Canadian Solar acknowledges that the Chinese Communist Party (CCP) could “intervene or influence” its operations in China, exposing the firm to significant legal and operational risks.
This isn’t an isolated case. Trina Solar North America’s president openly boasted about a Texas project representing a “significant investment in American manufacturing” to a Chinese state-run newspaper, highlighting a concerning pattern of dual messaging.
Representative John Moolenaar, Chairman of the House Select Committee on the CCP, has sounded the alarm, focusing on companies receiving federal subsidies while maintaining strong affiliations with China. He’s pushing for legislation, the “No Gotion Act,” to prevent these funds from reaching companies based in countries of concern.
The concern extends beyond direct investment. Representative Carlos Gimenez, who fled communist Cuba as a child, warns that ceding control of critical supply chains to geopolitical rivals comes at a steep cost, echoing past failures to recognize threats from companies like Huawei and TikTok.
Canadian Solar’s workforce exemplifies the imbalance: approximately 12,000 employees in China compared to less than 6,000 worldwide combined. This disparity underscores the extent of its reliance on Chinese manufacturing and potential influence.
Reports indicate that Chinese solar companies are heavily subsidized by their government, receiving as much as $140 million in financial support, creating an uneven playing field that threatens Western competitors.
The situation became even more complex with the emergence of T1 Energy. Originally a subsidiary of Trina Solar, it was sold to another U.S.-based, yet Chinese-tied company, rebranding itself as a champion of American manufacturing.
Trina Solar’s founder, Gao Jifan, is a delegate to the Chinese National People’s Congress and maintains close ties to CCP-connected organizations, including roles within state-backed trade associations and research groups.
T1 Energy aggressively promotes its commitment to building a domestic solar supply chain, yet remains significantly dependent on Trina Solar, with the Chinese company owning a substantial stake – between 16-25% – and holding key board positions.
One board member reportedly held a leadership role at the Chinese Development Bank, a financial institution instrumental in funding China’s Belt and Road Initiative, further solidifying the connection.
Critics argue that this intricate web of ownership and influence represents a deliberate strategy of “geopolitical camouflage,” designed to mislead Western governments into believing these companies are genuinely independent.
The overarching dynamic reveals China’s persistent efforts to circumvent U.S. defenses, skillfully navigating regulations and keeping equity stakes just below the threshold that would trigger scrutiny as a “Foreign Entity of Concern.”
This situation demands a critical reevaluation of how the U.S. safeguards its economic interests and ensures that investments intended to bolster domestic industries don’t inadvertently strengthen its geopolitical rivals.
