Thomas Catenacci of the Washington Free Beacon reports an interesting development among American solar energy companies.
President Donald Trump’s Treasury Department is readying guidance aimed at preventing companies with significant Chinese ownership from receiving green energy tax credits. In response, Chinese solar firms are scrambling to create corporate entities that appear American but in fact have extensive ties to China, internal industry data and research reviewed by the Washington Free Beacon shows.
Take the Ontario-based global solar panel maker Canadian Solar. The company’s U.S.-based manufacturing and sales were long overseen by Canadian Solar’s Chinese subsidiary, CSI Solar. In December, Canadian Solar announced plans to resume direct oversight of its U.S. operation through a new joint venture. On paper, the move appeared to reflect a North American company making efforts to reshore its supply chain. Upon closer examination, Canadian Solar’s China ties remain strong.
The company’s founder and CEO, Xiaohua Qu, served as a committee member in the Chinese People’s Political Consultative Conference, a Chinese Communist Party-controlled government advisory body. In a 2012 interview with the state-run propaganda outlet China Daily, he referred to economies outside of China as “foreign markets” and said his “intention” as the head of Canadian Solar was to “focus on the Chinese market.” The majority of Canadian Solar’s assets and employees are based in China, as the company notes in its financial statements, which concede that it is exposed to legal and operational risks because “a significant portion of our manufacturing operations” are in the communist nation. The statements also note that Beijing considers six of Canadian Solar’s Chinese subsidiaries to be “high and new technology enterprises,” which are eligible for favorable tax rates.
Canadian Solar could nonetheless receive green energy tax credits courtesy of the U.S. taxpayer. Trump’s One Big Beautiful Bill Act—which the Treasury Department’s impending guidance is meant to enforce—stipulates that a company is ineligible for such credits if its Chinese ownership is 25 percent or more. Under its new structure, Canadian Solar’s Chinese subsidiary will hold a 24.9-percent stake in its U.S. operations.
