US solar subsidies break trade rules, distort global market

The United States has been accused of distorting the global solar photovoltaic (PV) industry by implementing protectionist policies, violating trade rules, and hindering international efforts to combat climate change. The Inflation Reduction Act of 2022 allocates billions of dollars in subsidies to support clean energy investments in the U.S., benefiting companies across the PV supply chain from raw materials to manufacturing.

One of the key beneficiaries, First Solar, received substantial government grants that contributed to its profitability and expansion plans. Other suppliers, such as Highland Materials and SolarCycle, also received significant subsidies for raw material production. These subsidies, along with state-level incentives, have raised concerns about fair competition in the global solar market.

China has formally lodged a complaint with the WTO over the U.S. solar subsidies, highlighting violations of international trade agreements. The U.S.’s discriminatory subsidies risk overcapacity and trade tensions in the global PV industry, ultimately hampering the transition to clean energy worldwide.