Due to the uncertainty regarding whether related products meet the eligibility for U.S. government subsidies, American solar installers have stopped collaborating with U.S. solar factories with Chinese backgrounds.
<h4>Key Points:</h4>
<ul>
<li>Reuters reports that U.S. solar panel manufacturers with ties to China may not be eligible for U.S. subsidies for residential solar projects.</li>
<li>Jinko Solar is selling 75.1% of its Florida factory in the U.S. to an American private equity firm, seemingly to maintain the subsidy eligibility of its products.</li>
</ul>
Yang Ge
As U.S. President Trump prepares to visit China this week and meet with Chinese President Xi Jinping, protectionist measures against Chinese products may become one of the most important topics of discussion. One significant discussion point may focus on solar products, including not only those produced in China but also those produced by Chinese-invested factories in the U.S.
This is the core content of a Reuters report last Friday, which revealed that American solar installers, as well as insurance companies and banks, have stopped dealings with U.S. solar component manufacturers backed by Chinese investments. This includes leading residential solar installer Sunrun (RUN.US), which has ceased purchasing solar panels from U.S. factories associated with Chinese companies.
In direct response to this challenge, leading Chinese solar panel manufacturer Jinko Solar Holding Co., Ltd. (JKS.US; 688223.SH) has agreed to sell 75.1% of its Florida factory in the U.S. to private equity firm FH Capital. FH Capital disclosed this information in a statement released on the same day as the Reuters report. Jinko Solar will retain the remaining 24.9% stake in the factory, which is located in Jacksonville and began production in 2018.
The proportion of this equity sale is quite revealing; last year, under strong support from the Trump administration, the U.S. passed legislation that significantly reduced subsidies for residential solar installations and imposed restrictions on the remaining subsidies. One of the restrictions states that installation projects using solar panels produced by factories with more than 25% ownership by Chinese companies are not eligible for subsidies.
Nigel Cockroft, General Manager of Jinko Solar in the U.S., stated, &#34;We believe this transaction will provide the new joint venture with the appropriate equity structure, management model, and strategic direction to expand capacity and meet the growing market demand for high-performance domestically produced renewable energy products.&#34; Both parties also indicated that after the transaction is completed, they plan to at least double the factory's current annual capacity of 2 gigawatts and begin producing energy storage systems.
According to Reuters, Jinko Solar's competitor LONGi Green Energy (601012.SH) has recently also reduced its stake in its joint venture production facility in Ohio, U.S. to below 25%. Other Chinese companies facing similar risks due to U.S. domestic factories include Trina Solar (688599.SH), JA Solar Technology (002459.SZ), and Canadian Solar (CSIQ.US)
Reuters quoted a spokesperson from the Chinese Embassy in the United States stating that China has criticized the relevant restrictions as discriminatory. This is not surprising.
Investors welcomed Jinko Solar's latest move, and after the announcement, Jinko Solar's stock price rose 5.3% last Friday. Over the past 52 weeks, the stock has increased by 30%, mainly driven by market expectations of a recovery in the photovoltaic industry. The industry has accumulated a massive surplus capacity over the past three years and has been trapped for more than a year.
Overall, the signs of industry recovery appear positive. The war between the United States and Israel against Iran has pushed oil prices to multi-year highs, highlighting the market's demand for more reliable energy sources, bringing new momentum to the photovoltaic industry. Even before this, prices for solar components and solar panels had shown signs of stabilization after more than a year of decline, as Chinese manufacturers, encouraged by Beijing, gradually shut down older and less advanced capacities.
<h4>Low Value-Added Factories</h4>
Although selling most of the equity in U.S. factories may help Chinese companies avoid the restriction that shareholding cannot exceed 25%, the reality is that the technological content of these factories is quite limited and not the type of manufacturing facilities that the Trump administration truly hopes to attract. This is because these factories mostly only handle the final assembly of components, while most, if not all, core components are still imported from China.
Therefore, if the Trump administration requires Chinese companies to transfer more high-tech manufacturing processes to these factories as a condition for their products to qualify for subsidies, we would not be surprised. However, this could be quite tricky, as Beijing has signaled that it may restrict Chinese companies from exporting cutting-edge technology to overseas factories, and China has previously made similar demands of foreign companies entering the Chinese market.
According to Jinko Solar's 2025 annual report, about one-fifth of the company's revenue last year came from the Americas market, but there was no data broken down by country. The United States is likely its largest market in the region, estimated to account for about 15% of the company's total revenue. As China significantly slows down its investment in new solar installations this year after years of large-scale additions, the importance of overseas markets like the United States is expected to further increase. Currently, China holds more than half of the world's solar installation capacity.
The significance of the tensions between the United States and China lies in the fact that other markets, such as the European Union and India, have also long been dissatisfied with China and have taken similar actions.
These issues have accumulated over many years, and we do not believe they can be resolved overnight during Trump's visit to Beijing. However, at least the leaders of both sides can directly exchange views and gain a deeper understanding of each other's concerns. China has recently shown a willingness to consider Western positions, such as canceling long-standing policies and no longer exempting Chinese solar manufacturers from certain value-added taxes on exported products.
Meanwhile, despite facing many headwinds over the past year, Jinko Solar and its peers continue to show signs of recovery.
At the end of last month, Jinko Solar announced that its revenue in the first quarter of this year fell 11.5% year-on-year, an improvement compared to a 15% decline in the fourth quarter of last year and a 34% plunge in the third quarter. More importantly, the company's gross margin has rebounded to 8.3% in the latest quarter after dropping to a low of just 0.3% in the previous quarter. With the improvement in operating conditions, the company recorded an adjusted net loss of 549 million yuan (approximately 80.7 million USD) in the latest quarter, a significant improvement compared to a loss of 1.07 billion yuan in the same period last year
Despite Jinko Solar currently facing significant losses and relatively low profit margins, it does not appear impressive on the surface. However, the overall trend leans positively towards recovery in the next one to two years. Moving forward, Beijing needs to take action from a more macro perspective to create favorable conditions for Chinese solar companies to export some technology and expertise, in order to reduce or even eliminate the geopolitical issues that have plagued the industry in recent years.
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On the evening of May 13, Air Force One touched down in Beijing, marking the start of a three-day state visit — the first by a U.S. president in nine years. The CEOs of Nvidia, Apple, Boeing, and Qualcomm are reportedly traveling with the delegation. All eyes are on whether the two sides can break the deadlock on tariffs and chip controls. Do you think this summit will deliver?

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The controversy over solar subsidies between China and the United States may become the focus of the Xi-Trump meeting. Due to uncertainty, American solar installers have stopped collaborating with factories backed by Chinese capital. Jinko Solar is selling 75.1% of its Florida plant to maintain subsidy eligibility. The protectionist measures by the United States against Chinese products, especially solar products, may be a key topic of discussion during the talks. This move is a direct response to the legislation passed by the United States last year, which restricts the subsidy eligibility of solar panels produced by Chinese enterprises

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