A conversation about "foreign entity of concern" rules with Jake Higdon and Isabel Munilla -- why they are needed and how Republicans are botching them.
I do greatly admire and congratulate you on asking the tough questions which few if anyone seems to do. Keep up the good work.
It's hard to write this, I didn't enjoy the interview at all. I found the content provided to be so infuriating from its lack of reality and coherence. To me to call solar a national security issue and to compare it to covid ( which really was about PPE) to be not a serious argument. Oh I get it that the Biden administration said so, and there are many people including those interviewed who either actually believe it or are just not willing to deviate from that narrative. There isn't any part of our economy that is 100% home grown not cars or tires or computer chips or TV's or you name it. If you prioritize manufacturing vs cost, you get what we currently have. Solar panels at 4-5X what they cost on the open market with many 10's of billions of dollars in subsidies to do it and the actual panels being comprised of foreign content assembled in the US. Meaning either less solar installed or it's going to be lots more expensive with the combined costs of the subsidies, and the tax credits are now higher due to the higher costs, it's just nuts.
But let me ask as its never seemed to be brought up, so we end up actually making solar panels from the silicon to the silica to the aluminum etc but we don't make inverters. We dont make the parts that make up the inverters. We don't actually make the metals that go into transformers to bring those solar panels onto the grid. The inconsistencies of the argument they make as well as the Biden administration's direction of its energy policy was schizophrenic. Even Mr. Jigar Shah has said the same.
Another aspect often quoted but never questioned is China is heavily subsidizing its solar, IE they are selling them below cost. When the reality seems to be quite different. In the beginning yes they did lots of low interest loans. But China has many other things that are just less expensive: much cheaper electricity, lower cost to build, less restrictive Environmental regulations, less expensive labor and the list goes on. But those aren't direct subsidies specific to solar. VS the US which has been subsidizing solar via the ITC, PTC, loan guarantees, other tax breaks as well as net metering which are direct subsidies.
I can't remember what podcast and it might even have been yours where Mr. Shah was on a panel with 2 european solar experts. Mr Shah was yes we need to make solar domestically, the two from europe said, it's over, China won, we can never compete so don't try. Just buy the inexpensive panels and try to figure out something that you can do better and cheaper. Of which I wholeheartedly agree, my point of view being a 30 year solar veteran is it's all about more solar now at the least expensive cost, full stop.
Yeah, these folks and most Beltway folks just seem to have internalized some "security" arguments that aren't really actually important, but seem important to public opinion at the moment. Back when I started solar and efficiency etc, part of the appeal to public opinion was "domestic" as opposed to "Araaaab" energy, though solar panels were displacing domestic gas or electricity. We also thought we were running out of the former.
The podcast Jay refers to is "Redefining Energy," and the Euro investor hosts have pushed back on other US-nationalistic jive. They also note in that episode how really 90% of the value of a solar project or installation is local, not the panels themselves. They also noted how the EU data privacy law led to making battery packs and BMS in the EU while buying the raw batteries from CATL.
There was recently a study of solar patents; China led on direct manufacturing; EU was second but more focused on mounting and assembly, stuff like the Norwegian "Over Easy" system, at least the US has some great tracker tech.
In any case, the overall strategy of the GOP seems to be to add costs, risks and permitting roadblocks to anything that replaces or displaces FFs. Chris Wright at work me thinks. Though locals with very different social media feeds than this have been whipping up opposition to wind and solar and batteries and EVs and even efficiency.
Excellent interview outlining how the new Regime has failed to tackle Tariffs and Energy policy coherently. This is not unlike all of this Administration's policies, which are Draconian at best and not well thought out. I think the MAGA motto should be "Make America Stupid". Defund Education, discourage innovation, discourage clean, cheap Energy, and encourage wasteful dirty, unhealthy fossil fuel use. This is especially given that Solar and wind have only upfront costs, no fuel, no extraction and purification costs (which use about 25% of what is extracted). It seems to be a last-ditch effort to hold onto what those in power profit from, even though it will likely be short-lived.
It should be noted that FEOC does NOT apply to Investment Tax Credits granted under 26 USC 48. Those include those for geothermal heat pump energy property. Of course, very few, if any, geothermal heat pump systems installed in the USA would be impacted even if the FEOC rules did apply to them.
I do greatly admire and congratulate you on asking the tough questions which few if anyone seems to do. Keep up the good work.
It's hard to write this, I didn't enjoy the interview at all. I found the content provided to be so infuriating from its lack of reality and coherence. To me to call solar a national security issue and to compare it to covid ( which really was about PPE) to be not a serious argument. Oh I get it that the Biden administration said so, and there are many people including those interviewed who either actually believe it or are just not willing to deviate from that narrative. There isn't any part of our economy that is 100% home grown not cars or tires or computer chips or TV's or you name it. If you prioritize manufacturing vs cost, you get what we currently have. Solar panels at 4-5X what they cost on the open market with many 10's of billions of dollars in subsidies to do it and the actual panels being comprised of foreign content assembled in the US. Meaning either less solar installed or it's going to be lots more expensive with the combined costs of the subsidies, and the tax credits are now higher due to the higher costs, it's just nuts.
But let me ask as its never seemed to be brought up, so we end up actually making solar panels from the silicon to the silica to the aluminum etc but we don't make inverters. We dont make the parts that make up the inverters. We don't actually make the metals that go into transformers to bring those solar panels onto the grid. The inconsistencies of the argument they make as well as the Biden administration's direction of its energy policy was schizophrenic. Even Mr. Jigar Shah has said the same.
Another aspect often quoted but never questioned is China is heavily subsidizing its solar, IE they are selling them below cost. When the reality seems to be quite different. In the beginning yes they did lots of low interest loans. But China has many other things that are just less expensive: much cheaper electricity, lower cost to build, less restrictive Environmental regulations, less expensive labor and the list goes on. But those aren't direct subsidies specific to solar. VS the US which has been subsidizing solar via the ITC, PTC, loan guarantees, other tax breaks as well as net metering which are direct subsidies.
I can't remember what podcast and it might even have been yours where Mr. Shah was on a panel with 2 european solar experts. Mr Shah was yes we need to make solar domestically, the two from europe said, it's over, China won, we can never compete so don't try. Just buy the inexpensive panels and try to figure out something that you can do better and cheaper. Of which I wholeheartedly agree, my point of view being a 30 year solar veteran is it's all about more solar now at the least expensive cost, full stop.
Thx Fred. Well said.
Yeah, these folks and most Beltway folks just seem to have internalized some "security" arguments that aren't really actually important, but seem important to public opinion at the moment. Back when I started solar and efficiency etc, part of the appeal to public opinion was "domestic" as opposed to "Araaaab" energy, though solar panels were displacing domestic gas or electricity. We also thought we were running out of the former.
There are some "critical" minerals/materials for defense and other applications and rare earths are one. But somehow the Biden admin blew the strategy to get our one big mothballed mine reopened. https://www.nytimes.com/2025/06/09/business/china-rare-earth-samarium-fighter-jets.html
The podcast Jay refers to is "Redefining Energy," and the Euro investor hosts have pushed back on other US-nationalistic jive. They also note in that episode how really 90% of the value of a solar project or installation is local, not the panels themselves. They also noted how the EU data privacy law led to making battery packs and BMS in the EU while buying the raw batteries from CATL.
There was recently a study of solar patents; China led on direct manufacturing; EU was second but more focused on mounting and assembly, stuff like the Norwegian "Over Easy" system, at least the US has some great tracker tech.
In any case, the overall strategy of the GOP seems to be to add costs, risks and permitting roadblocks to anything that replaces or displaces FFs. Chris Wright at work me thinks. Though locals with very different social media feeds than this have been whipping up opposition to wind and solar and batteries and EVs and even efficiency.
Excellent interview outlining how the new Regime has failed to tackle Tariffs and Energy policy coherently. This is not unlike all of this Administration's policies, which are Draconian at best and not well thought out. I think the MAGA motto should be "Make America Stupid". Defund Education, discourage innovation, discourage clean, cheap Energy, and encourage wasteful dirty, unhealthy fossil fuel use. This is especially given that Solar and wind have only upfront costs, no fuel, no extraction and purification costs (which use about 25% of what is extracted). It seems to be a last-ditch effort to hold onto what those in power profit from, even though it will likely be short-lived.
It should be noted that FEOC does NOT apply to Investment Tax Credits granted under 26 USC 48. Those include those for geothermal heat pump energy property. Of course, very few, if any, geothermal heat pump systems installed in the USA would be impacted even if the FEOC rules did apply to them.