The US clean energy manufacturing industry is starting to undergo a wholesale restructuring and recapitalisation as companies look to reduce their exposure to numerous risks, including FEOC.
In the past week, Chinese firms Envision Energy (via AESC) and JinkoSolar have sold majority stakes in battery and solar manufacturing assets, respectively.
These deals are the first of many that will reflect the collision of long-term political risk, Foreign Entity of Concern (FEOC) restrictions on tax credit eligibility, bankability and financeability and the US’ continued reliance on Chinese supply chains. That is according to Mona Dajani, law firm Cooley’s co-head of infrastructure, energy and real estate, who discussed the topic with Energy-Storage.news.
“This is not Chinese firms leaving the market entirely, it’s the US clean energy supply chain becoming recapitalised and politically restructured as the market starts to price, and take steps to mitigate, FEOC and related risks,” she said.
“This is Chinese-linked manufacturers restructuring operations to preserve access to US capital, tax credits and insurance markets,” Dajani explained. “That Chinese ownership is starting to become a financeability issue, and some major developers are pulling back from doing business with Chinese-linked companies.”
