Mike Carr, executive director of the Solar Energy Manufacturers for America (SEMA) Coalition, said that there should be a mechanism to restrict Chinese companies from accessing clean energy tax credits, such as the 45X battery subsidy. He made this statement on X.
“Everyone is thinking there should be a mechanism in place to restrict Chinese companies’ eligibility for credits,” said Carr. “There are several ideas about how to approach the issue of FEOC. SEMA supports a strong domestic supply chain for energy components. Chinese dominance in the sector poses long-term economic and national security risks.”
The SEMA Coalition has highlighted the introduction of the 2025 Foreign Pollution Fee Act by Senator Bill Cassidy as a measure to counteract what it views as unfair trade practices by Chinese solar manufacturers. In its statement, SEMA emphasized the necessity for stronger trade enforcement and environmental parity to safeguard U.S. clean energy production. The coalition’s support for the bill aligns with its broader stance that policies like the Inflation Reduction Act (IRA) and Section 45X must incorporate strict safeguards against adversarial foreign firms exploiting domestic tax credits.
The American Alliance for Solar Manufacturing Trade Committee (AASM) reports that Chinese solar companies have received over $50 billion in state subsidies between 2011 and 2023, enabling them to reduce manufacturing costs by up to 30%. According to AASM, Chinese firms currently dominate more than 80% of global solar manufacturing capacity and produce over 95% of solar wafers. This level of market concentration, according to AASM, increases systemic risk and undermines efforts to develop a secure and diversified U.S. solar supply chain.
According to the U.S Department of the Treasury, on December 1, 2023, proposed guidance was issued clarifying that clean energy tax credits under the Inflation Reduction Act, including Section 45X, may be denied to entities that are 25% or more owned, controlled, or influenced by a foreign government designated as a Foreign Entity of Concern (FEOC). The proposed rules define ownership and board control thresholds and apply to companies involved in producing battery components and critical minerals. Under Chairman Jason Smith’s alternative National Defense Authorization Act (NDAA)-based framework, foreign joint ventures or licensing agreements may still qualify, potentially weakening the Treasury’s FEOC standards.
Carr is the Executive Director of SEMA Coalition where he oversees policy advocacy for U.S.-based solar manufacturing. From 2012 to 2015, he served in senior roles at the U.S. Department of Energy, including Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy. Before that period, Carr spent eight years as Senior Counsel to the Senate Energy and Natural Resources Committee focusing on clean energy legislation.
