These volatile industry trends have adversely affected the operations of many solar companies, forcing some to reassess their business models and others to close factories or declare bankruptcy. These trends affect the ability of the United States to build a sustained domestic production base for PV equipment. Following an unprecedented period of growth, the number of PV systems in the United States reached more than 445,000 by the end of 2013, more than twice the total at the end of 2011. But even if the popularity of solar systems grows, falling equipment prices are likely to undermine efforts to sustain a solar manufacturing base in the United States. It is the material used to make the semiconductors that convert sunlight into electricity. Chinese manufacturers have come to dominate module manufacturing, making up about 70% of the total global production in 2013. In 2014, Suniva began construction of a second solar PV facility in Michigan. Estimates dating to 2010, before the imposition of dumping and countervailing duties on imports from China, indicated that U.S. content accounted for 20% of the value of U.S.-installed crystalline silicon modules and 71% of the value of U.S.-installed thin-film modules. For example, SolarWorld had fewer than 1,000 production workers in 2013, and Suniva expects to employ a few hundred production workers when its newest factory in Michigan becomes fully operational. Ten firms now control nearly half of global solar module production. U.S. Trade in Solar Products

As part of their global business strategies, U.S. solar panel manufacturers source a significant share of components outside the United States. The import decline may be related to the imposition of U.S. antidumping and countervailing duties on Chinese-manufactured solar cells in 2012, which resulted in double- and triple-digit tariffs on imports of PV products from China. The first case started in October 2011, when the Coalition for American Solar Manufacturing (CASM), led by the U.S. unit of SolarWorld, along with MX Solar USA, Helios Solar Works, and four unnamed companies, filed antidumping and countervailing duty petitions with the U.S. Department of Commerce (DOC) and the International Trade Commission (ITC). Solar equipment disputes have expanded beyond the United States and China. U.S. Government Support for Solar Power

Federal policies favoring development of a domestic solar power sector include support for the U.S. solar PV manufacturing industry as well as incentives for solar generation of electricity. An advanced energy manufacturing tax credit (MTC) was aimed at supporting renewable energy manufacturers. The current ITC, allowing residential and commercial owners of solar projects to offset 30% of a solar system's cost through tax credits, is in place through the end of 2016, when it is scheduled to revert back to a permanent rate of 10% for commercial investments and lapse entirely for residential investments. These include
the PV incubator program, which began in 2007 and aims to support promising commercial manufacturing processes and products; the PV supply chain and cross-cutting technologies project, which provides up to $20.3 million in funds to non-solar companies that may have technologies and practices that could strengthen the domestic PV industry; the Advanced Solar Photovoltaic Manufacturing Initiative (PVMI), with up to $112.5 million in funding over five years, to advance manufacturing techniques to lower the cost of producing PV panels; and SUNPATH, which stands for Scaling Up Nascent PV At Home and is funded at less than $45 million, aims to increase domestic manufacturing by supporting industrial-scale demonstration projects for PV modules, cells, substrates, or module components. While state-level renewable fuels standards, which require utilities to obtain a certain proportion of their electricity from renewable sources, may provide continuing demand for utility-scale PV installations in some states, the lower cost of gas-fired generation may limit interest.
Every President since Richard Nixon has sought to increase U.S. energy supply diversity. Job creation and the development of a domestic renewable energy manufacturing base have joined national security and environmental concerns as reasons for promoting the manufacturing of solar power equipment in the United States. The federal government maintains a variety of tax credits and targeted research and development programs to encourage the solar manufacturing sector, and state-level mandates that utilities obtain specified percentages of their electricity from renewable sources have bolstered demand for large solar projects.
The most widely used solar technology involves photovoltaic (PV) solar modules, which draw on semiconducting materials to convert sunlight into electricity. By year-end 2013, the total number of grid-connected PV systems nationwide reached more than 445,000. Domestic demand is met both by imports and by about 75 U.S. manufacturing facilities employing upwards of 30,000 U.S. workers in 2014. Production is clustered in a few states including California, Ohio, Oregon, Texas, and Washington.
Domestic PV manufacturers operate in a dynamic, volatile, and highly competitive global market now dominated by Chinese and Taiwanese companies. China alone accounted for nearly 70% of total solar module production in 2013. Some PV manufacturers have expanded their operations beyond China to places like Malaysia, the Philippines, and Mexico. Overcapacity has led to a precipitous decline in module prices, which have fallen 65%-70% since 2009, causing significant hardship for many American manufacturers. Some PV manufacturers have closed their U.S. operations, some have entered bankruptcy, and others are reassessing their business models. Although hundreds of small companies are engaged in PV-related manufacturing around the world, profitability concerns appear to be driving consolidation, with fewer than a dozen firms now controlling half of global module production.
In 2012, the United States imposed significant dumping and countervailing duties on imports of Chinese solar products after ruling that U.S. producers had been injured by dumped and subsidized solar equipment from China. In a second case, the U.S. Department of Commerce (DOC) and the U.S. International Trade Commission (ITC) ruled in 2014 and early 2015 that U.S. producers were being injured by imports of Chinese-made modules that avoided the duties imposed in 2012 by incorporating solar cells from Taiwan. While these duties may help U.S. production become more competitive with imports, the cost of installing solar systems might rise. Domestic demand for solar products may also be depressed by the end of various federal incentives. Unless extended, the commercial Investment Tax Credit for PV systems will revert to 10% from its current 30% rate after 2016, while the 30% credit for residential investments will expire.
Looking ahead, the competitiveness of solar PV as a source of electric generation in the United States will likely be adversely affected by the rapid development of shale gas, which has lowered the cost of gas-fired power generation and made it harder for solar to compete as an energy source for utilities. In light of these developments, the ability to sustain a significant U.S. production base for PV equipment is in question.