For more than two decades, workers at a plant in Perrysburg, Ohio, near Toledo, have been making something that other plants in the United States have long since stopped making: solar panels.
How the plant's owner, First Solar, has managed to hang on as much of the solar panel industry has moved from the United States to China is a key factor in the viability of President Biden's efforts to build a large green energy industry.
Mr. Biden and Democrats in Congress last year authorized hundreds of billions of dollars in federal incentives for solar panels, wind turbines, batteries, electric vehicles and semiconductors. This effort represents one of the most comprehensive applications of industrial policy ever undertaken in the United States.
As a result, many companies, including First Solar, have announced plans to build dozens of plants across the country. But no one is entirely sure whether that investment will continue, especially in areas like batteries or solar where China's dominance is deep and strong. Chinese manufacturers benefit from lower labor costs, economies of scale and incentives from a government seeking to control industries vital to combating climate change.
First Solar has survived by moving much of its manufacturing to China, in part because its panels do not use polysilicon silicon, the material used in most panels today that are almost entirely made in China. But it hasn't been an easy road, and the company has struggled at times, especially after the 2008 financial crisis.
"They're like unicorns," said Michael Heben, director of the University of Toledo's Center for Photovoltaic Energy and Innovation, which is partnering with First Solar. "It was not an easy story. The profit was quite round.'
Some analysts warn that trying to manufacture solar panels in the US is a mistake. Even in the best of times, the business generates modest profits and employs few people. It would be better to import panels from low-cost manufacturers to quickly transition from fossil fuels to renewables, said Jenny Chase, solar analyst at Bloomberg New Energy Finance.
"Solar panels will be cheaper," said Ms. The chase said when politicians are not fighting for domestic production. "In the United States, even with a boom in manufacturing, it's still going to be expensive."
But many lawmakers and company executives insist on manufacturing solar panels in the United States. They believe it would be unwise for the country and its allies, such as the European Union and Japan, to depend on China for important technologies. Supply chain chaos during the pandemic and growing economic animosity between Beijing and Washington have underscored the dire risks.
One thing is certain. the world will need many more solar panels to reduce greenhouse gas emissions. According to energy experts, the installed solar capacity in the world should be 20 times higher than today, and maybe 70 times.
"We're going to need a lot of solar panels around the world," said Nancy Hegel, director of the National Renewable Energy Laboratory's National Photovoltaic Center. "While this is a very ambitious goal, it is also achievable given the growth of photovoltaics in recent years."
First Solar CEO Mark Widmar said he's confident his company and others can quickly expand production in the U.S. The Tempe, Arizona-based company is building its fifth U.S. plant in Louisiana. The company is already expanding into Ohio, building three plants and one in Alabama. The company also has factories in Vietnam and Malaysia and is in the process of joining India.
"It's terrible," said Mr. Widmar said at the Perrysburg plant, describing the company's plans. "It really is David vs. Goliath."
Mr. Widmar, 58, who grew up in a working-class family in South Bend, Ind., a two-and-a-half-hour drive from Perrysburg, said he was driven by a desire to create American jobs and expand America's leadership in technology. . .
He was the first in his family to go to college. his father worked in the post office and his mother was a secretary and earned a bachelor's degree in accounting and finance from Indiana University.
Seven years ago, immediately after becoming the general director, Mr. Widmar said he pushed his engineers to create a new generation of solar cells that would produce more energy at a lower cost per watt. The move was risky, as it required the dismantling of old equipment and a large investment in new equipment, which led to a significant reduction in production in 2018.
"I said. 'Let's go,' said the gentleman.'' Widmar said. "Not many managers would make such a decision. I knew we had to grow."
First Solar was founded in 1990 by Harold McMaster, an inventor and entrepreneur who pioneered the production of condensed glass used in skyscrapers and solar panels.
In the 1990s and 2000s, the solar panel business grew rapidly in the United States, Europe, and Japan. But like many fast-growing industries, it soon fell on hard times and stalled, including Solyndra, which was supported by the Department of Energy during the Obama administration.
At the same time, the Chinese government and Chinese companies have redoubled their efforts to use the technology. They have greatly increased the production of panels, which has helped reduce costs significantly.
First Solar, which benefited from an investment by the Walton family of Walmart founders, has survived in part by quickly abandoning expansion plans. According to a study by the Center for Strategic and International Studies in Washington, this saved the company from selling the panels at a huge loss.
It also helped that First Solar's panels were different from most Chinese panels. Instead of silicon, the company used a special thin film of cadmium telluride.
One thing that has helped First Solar is strong growth in Europe, where many countries, especially Germany, have offered generous subsidies to encourage solar.
However, First Solar is not immune to the ups and downs of the industry. The company lost more than $100 million in 2019 before earning $400 million in 2020 and 2021. It lost $44 million last year, which the company attributed to fluctuations in freight and shipping costs.
Mr. Widmar said that the Inflation Reduction Act, Mr. Biden's climate bill paved the way for the growth of the domestic solar energy industry. But he's worried the law could become a "political football" -- a real threat -- as some Republican lawmakers have tried to repeal the law in whole or in part.
He also said the United States should protect domestic manufacturers from unfair Chinese competition. "If we want to create a diverse, competitive and sustainable solar industry, China's anti-competitive behavior must be addressed," he said.
One of the advantages of First Solar Mr. Human rights groups and U.S. government officials believe China's western Xinjiang region is less dependent on forced labor, Widmar said.
In August, First Solar announced that subcontractors were using forced labor at its factory in Malaysia. Subcontractors forced migrant workers to pay fees, withheld wages and passports. Mr Widmar said there was a determination to publish the findings, pay compensation to the workers and return the passports to the subcontractors.
"I'm mainly an auditor," said Mr. - said Vidmar. "I've always believed that you should always do what makes you sleep well at night."
Human rights activists worry that forced labor, sometimes called "modern slavery," will become more common as manufacturers ramp up production of solar panels. Walk Free, an Australian human rights group, estimates that 50 million people worldwide were living in forced labor in 2021, an increase of almost 10 million since 2016.
Michael Carr, executive director of the Solar Energy Manufacturers of America trade group, said more local manufacturers like First Solar are needed to ensure a safe supply of panels in the United States that are not affected by forced labor.
"The production of modules in the United States has begun to develop," said Mr. - said Carr. But, he added, "our international competitors have gained a very big advantage."
