Chinese-backed solar factory stirs suspicions in rural Ohio

In the sleepy Midwestern town of Pataskala, Ohio, a 1mn sq ft factory built on former farmland is marked with a sign: Illuminate USA.

The utilitarian building is due to start production this month as one of the largest solar panel manufacturers in the US. At full capacity the $600mn plant will employ more than 1,000 workers, giving a jolt to the economy of the rural community on the fringes of Columbus, the Ohio state capital.

The factory is an example of the kind of project that President Joe Biden is touting as he campaigns for re-election, bringing manufacturing onshore while turning the US into a leader in technologies required to decarbonise energy systems.

“When a company like Illuminate USA comes into our area, it really makes people think, ‘Wow this is amazing, this is great. Not only are these good paying jobs, it’s a job that I can feel good about,’” said Angela Carnahan of Ohio Means Jobs, an employment office.

Not everyone is as excited. Illuminate USA is a joint venture between Invenergy, the largest private US renewables developer, and Longi, the world’s largest solar panel manufacturer. The latter partner has aroused local suspicions because it is based in China.

“Pataskala is now infected with the cancer known as the Chinese Communist party,” Jerry Forns, a resident, said at a city council meeting in January. “Does anybody really think the CCP cares that this country was founded on Judeo-Christian principles?”

The pushback against the project underscores US policymakers’ conundrum as they seek to build a domestic supply chain for solar power — the fastest-growing source of new generation on the US power grid — in a country that lacks China’s prowess in the technology. China produces more than three-quarters of all panels and an even higher share of its inputs like wafers, according to the International Energy Agency.

Kurt Wagner, Illuminate USA’s chief financial officer, told the Financial Times that the partnership with Longi gives the US the opportunity to “really catch up on the technology”.

“A company in China is going to provide us with the technology and help us really get a foothold on manufacturing here,” he said.

The Inflation Reduction Act signed by Biden in 2022 included billions of dollars of subsidies to produce clean energy technologies domestically and deploy them rapidly. The incentives support buying local, but foreign manufacturers can receive tax credits if they open US factories.

“The bottom line is these Chinese companies are among some of the best manufacturers in the world . . . Insulating US factories from Chinese suppliers is pretty much impossible at this point,” said Pol Lezcano, senior associate at consultancy BloombergNEF.

Longi is not alone: some of the largest Chinese solar panel manufacturers including Jinko Solar and Trina Solar have announced plans to build US factories as Washington reviews tariffs on solar components and prepares to impose fines on companies that have dodged duties by assembling solar products in south-east Asia, including on Vina Solar, a Longi subsidiary.

The county of Licking, which includes Pataskala, is at the forefront of efforts by the White House to attract more high-tech manufacturing to the US, with chipmaker Intel planning to build $20bn worth of semiconductor factories there. The development has helped drive the unemployment rate down to a record low of 2.7 per cent.

As for the Illuminate USA plant, an opposition group called Not in Pataskala has warned against a “red menace” and adopted a logo with an X behind a hammer and sickle.

State and local officials have reiterated that Illuminate USA is an American company and denied accusations of its ties to the Chinese government. Chicago-based Invenergy has the majority stake, owns the building and will be the anchor customer for the panels. The company received $4mn in incentives from the state of Ohio and a 15-year tax abatement on property improvements.

“They’ve got pitchforks and T-shirts and posters. They don’t want to listen to reason,” Pataskala mayor Mike Compton said of opponents to the factory. Illuminate USA marks the largest manufacturing investment in the rural town’s history.

Jim Murphy, president of Invenergy, said the factory was an “opportunity” to “supply a growing market” for…