China's Retreat from U.S. Solar Market Amid Policy Changes and FEOC Rules

In recent years, the state of U.S. infrastructure has frequently been in the spotlight, emphasizing the pressing need for modernization. From crumbling bridges to a dated energy grid, significant investments have been proposed to rebuild these systems. The Biden administration made a substantial push with a $891 billion package aimed at making infrastructure safe, sustainable, and environmentally friendly. Yet, recent developments suggest a shift in momentum.

Recent findings reveal that Chinese companies have stepped back from planned energy ventures in the U.S., totaling an estimated $2.8 billion. According to the Rhodium Group's research, over half of the clean-energy technology projects proposed by China since 2022 have faced delays, pauses, or cancellations. Former senior Department of Commerce counselor, Margaret Jackson, stated to Bloomberg, “The policy environment is getting more restrictive.”

Jackson, who is now with the Center for Strategic and International Studies, noted that the environment remains unwelcoming for green tech investments, even if Trump’s decisions shift due to various influences. She remarked, “I’m not sure that below him there’s a lot of appetite to create space for more Chinese investment.”

Global Clean Tech Dynamics

Rhodium's analysis shows a wider pattern of reduced commitments from leading regions, including China, the U.S., and Europe, during Trump’s term. China's unique position comes from its past aggressive state-backed growth in clean energy sectors, leading to a significant rise from $37 billion in 2018 to $189 billion in 2023. Despite global setbacks, China’s solar manufacturing ambitions remain vast, with ongoing projects totaling 485 gigawatts of solar cell production capacity.

According to a recent report by Rhodium, “The new policy focus on solar manufacturing and the EV supply chain is likely to emphasize maintaining China’s leading position and closing remaining technological gaps and overseas dependencies.”

Shifts in U.S. Solar Investments

A noticeable trend shows China-based firms reducing their stakes in U.S. solar ventures. This month, JinkoSolar sold a 75.1% stake in its U.S. subsidiary to a private equity entity, which will manage its Jacksonville, Florida solar panel facility. Similarly, China’s Trina Solar and Beijing-headquartered JA Solar divested major stakes to American firms following Trump’s White House win in 2024.

This exit is largely influenced by the Trump administration’s new Foreign Entity of Concern (FEOC) restrictions, which impose limits on Chinese ownership in U.S. energy initiatives. Industry experts, as reported by Reuters, anticipate a rise in energy costs as these restrictions delay projects.

As Aaron Halimi, CEO of Renewable Properties, noted to Reuters, “This is undoubtedly going to continue to increase the cost of power in the United States.”