Senate $3.5 trillion budget plan includes ban on solar projects using materials sourced from China

In addition to passing a $1 trillion infrastructure bill yesterday, the U.S. Senate this morning adopted a $3.5 trillion budget plan before adjourning for summer recess. Both congressional chambers will now draft a final budget. A vote on final legislation will happen within a few weeks.

Solar cells at SolarWorld’s Oregon manufacturing facility. Archive photo from the Oregon Department of Transportation.

The four core areas of spending focus on families, climate, healthcare, and infrastructure and jobs. Included in the plan is one amendment that could significantly affect the U.S. solar industry.

A proposal from Sen. Dan Sullivan (R-Alaska) was adopted (90-9) that would prohibit any renewable energy project using materials produced in China from receiving federal funds and subsidies. In layman’s terms: Any solar project using components produced in China could not receive the federal ITC or other tax breaks.

“If we are going to build out our domestic renewable energy industry, we need to have an honest conversation about where we are sourcing these materials,” Sen. Sullivan said. “We cannot continue to be dependent on China for critical minerals — resources that are crucial to our economy and national security, and which we have in abundance in the U.S., particularly in Alaska. By developing our national supply chains and processing capabilities, we can create thousands of good-paying jobs, protect our national interests, deny economic support for violators of basic human rights and build out America’s all-of-the-above energy sector.”

China controls 80% of the world’s polysilicon supply, with nearly half being produced in the Xinjiang province, which has been signaled out as a region using forced labor. Polysilicon is the foundational building block of crystalline silicon solar panels, the most common solar panel type installed on utility-scale, commercial and residential solar projects.

Solar Power World released an in-depth look earlier this week at the polysilicon and solar manufacturing battle happening right now between the United States and China. 

With no ingot, wafer or solar cell manufacturing present in the United States right now, it is highly likely that all solar panels coming into the country have some Chinese-sourced material. U.S. Customs and Border Protection has already issued full bans on completed solar panels that use polysilicon from certain companies located in Xinjiang.

The Senate budget amendment would not just affect solar panels and their materials coming from China, but any component used in a solar project.

Solar Power World will continue to follow this story as the budget travels through final approvals.

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