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The US Military's Transition and their Dependence on China

On June 18th, 2024, the Department of Defense announced the installation of two new solar facilities in South Carolina. These facilities are part of the Department of Defense's plan to transition to 100% green energy by 2030, in line with President Biden’s goals. The installations reflect the growing usage of solar energy amongst the US military and the industry's massive growth in general. Unfortunately, while the largest institutional GHG emitter in the world transitioning away from its non-renewables is a good thing, it comes with one potential drawback: they are increasingly reliant on Chinese supply chains. As the military works to decrease its reliance on China in many key sectors, from weapons to cybertechnologies, increasing reliance on another supply chain they dominate is the last thing it might want.


The Solar Market and Chinese Dominance

Chinese solar dominance can be traced back over a decade. Seeking to distance themselves from oil import routes controlled by the US and India, China turned to solar energy as an alternative. Subsidies and cheap labor allowed China to quickly increase its manufacturing capacity, dropping the price of solar by 75%, and causing competitors in Europe and America to shut down due to unprofitability. From there, China continued to dominate the market. Today, they account for 80% of global solar cell production and 75% of solar module production. 


That’s just one part of China’s dominance over the solar market, though. On top of being able to leverage cheap labor and manufacturing costs, China has a tight grip over the minerals necessary for making solar cells. Solar technology requires minerals such as gallium and indium which the US relies 100% on importation to acquire. Conversely, China controls 98% of global gallium production, meaning that even if the US had the capabilities to make solar technology on the same scale as China, they would still need to go to them. Another key reason why China remains so dominant today is due to government subsidies and labor laws. In 2023, the Chinese government invested 130 billion dollars into its solar industry.

Furthermore, China’s relatively lax labor laws allow producers to underpay their workers and keep costs lower. The exploitation of minority groups such as the Uyghurs additionally aids in this. Nearly half of polysilicon, a material used in 95% of solar panels worldwide, comes from Xinjiang, where many of these minority groups are being held. 


All of this culminates in the production of Chinese solar technology being 44% cheaper than what the US can achieve. A combination of cheap prices and mineral control have catapulted China to the forefront of solar technology, putting them in a position very difficult for any country to break. 


The Military’s Solar Transition

The US military is set to reach 3 gigawatts of solar energy by 2025. They have been greatly increasing their investments over the past decade, with 71% of their renewable additions between 2012 and 2017 being solar. There are two reasons for this transition: ethics and security. Transitioning to solar energy is the ethical thing to do. As an institution, the US Department of Defense releases more emissions than any other institution in the world, having released 51 million tons of harmful CO2 into the air in 2020, more than some small countries. Meeting their goals of being 100% green by 2030 would stop this massive carbon expenditure and push us further towards preventing the drastic effects climate change will have. 


Just as important is that solar energy can help secure the military's electric grid. The current electric grid is susceptible to cyberattacks, physical attacks, and natural disasters. The military plans to install a system of microgrids - small electrical grids able to function independently from larger ones- that make use of solar energy in all of its installations. This would lessen the effects an attack on the national grid would have. The Michigan Technological University found that the military would need 17 gigawatts of solar to achieve energy resiliency and safeguard its ability to operate in the case of an attack.¹ 


While the transition is seemingly a good thing, it comes with a lot of issues. China’s dominance over the solar supply chain would force the military to be reliant on their supply. China has already implemented sanctions on critical goods used by the US military, such as semiconductors and metals needed in EVs. As geopolitical tensions rise, sanctions on the solar industry could hamper the military's efforts to secure their grid. 


Furthermore, domestic opinion is turning against trade with China. Increasingly, especially amongst Republicans, people are seeing trade with China as harmful to the US. Two-thirds of Americans see trade with China as somewhat negative or very negative, with that viewpoint most concentrated amongst conservative Republicans, amongst whom  7 of 10 view trade as beneficial mainly to China. Such opinion is reflected in policy. Under President Trump, tariffs were passed against China and Chinese goods. Some of the tariffs targeted solar parts and technology, with the Solar Energy Industries Association finding that they reduced solar installation projections between 2023 and 2024 by 46%.² 


This puts the military in a tough situation. Not transitioning would make it continue to emit harmful emissions and leave its electrical systems vulnerable, whereas transitioning would put it in the hands of unreliable supply lines that may be cut or hampered at any time. 


A Catch-Up Game

In recent years, policies have been implemented to help the US solar industry catch up. In 2022, President Biden signed into law the Inflation Reduction Act, which allocated billions for the clean energy industry. Solar manufacturers in the US, such as First Solar, the largest of them, are set to receive billions in subsidies annually over the next decade. While still far behind Chinese companies which have been receiving subsidies for decades, it’s a necessary start. Tariffs that are hurting current solar installations are also giving domestic manufacturers some breathing room to grow. President Trump, as a part of his trade war with China, implemented a 25% tariff on Chinese solar goods under Section 301 of the Trade Act of 1974, citing unfair business practices in the nation. President Biden has since then continued and even proposed increasing that number to 50%. He has further implemented the Ughyer Forced Labor Prevention Act, banning importations from the Xinjiang province of China, and critically slowing down polysilicon imports. These policies alongside a growing market have seen the domestic solar industry jump 71% in its manufacturing capacity in Q1 of 2024 alone.


Looking to the future, US solar manufacturing is set to grow massively. Estimates find that from 2030 onwards, the US will be installing 48-50 GWdc (gigawatts of direct capacity) annually. Still, this falls far behind China, which installed 609 gigawatts in 2023. Additionally, the problem of mineral resources will remain, though there is some good news in this regard. Recent mining discoveries of gallium in Texas could completely fulfill all of the US’ needs for the next 2 millennia. Furthermore, indium production in our allies, specifically Canada, South Korea, and Japan remains high and provides the US an alternate source of the mineral if needed. Finding these alternate avenues is going to be extremely important if the US military wants to safeguard its transition. Already, we’re seeing rising tensions with China over semiconductors, the South China Sea, Taiwan, and more. The military relies heavily on trade with this nation for many of its most important goods, and adding another would just make the problem worse. As we look to see the impact of the military's transition, we can only wonder how to balance change and growth with the security of the nation. 


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