Why a Chinese Firm’s Solar-Panel Factory in Arizona Failed

In October 2010, a new factory manufacturing solar panels opened in Arizona to high expectations and much media fanfare. The owner, Wuxi-based firm Suntech Power, appeared to be at the vanguard of a new wave of Chinese investment into America’s budding solar manufacturing industry. At the time of the ribbon-cutting ceremony, The Arizona Republic lauded the state’s good fortune in luring Suntech’s $10 million investment as “a major national coup.” Arizona’s governor Jan Brewer told the assembled crowd, “Today, we celebrate a cornerstone in advancing Arizona’s competitive position in the global solar marketplace.”

Unfortunately, the reality fell far short of early hopes. Suntech’s Arizona plant closed in March 2013, with all its workers laid off. At least two other Chinese firms, Yingli Green Energy and UpSolar, had seriously examined the possibility of manufacturing solar panels in the U.S., but in the end neither opened a factory. Instead of heralding a new wave of productive Chinese investment, Suntech’s misstep was the beginning and the end of the story.