US solar PV developer Pine Gate Renewables recently filed for Chapter 11 bankruptcy protection, signaling the continued downturn in the US renewable energy industry.

The filings show that Pine Gate has a debt of $4.4 billion, while its cash reserves are only $8.5 million. Despite having a project pipeline of over 30GW and more than 1,000 employees, the company has not escaped insolvency.

Pine Gate's bankruptcy is not accidental. Its over-reliance on high-leverage financing and credit expansion, coupled with rapid expansion in an environment of low interest rates and favorable policies, led to its downfall. Founded in 2016, the company attracted investment from investors such as Blackstone and Carlyle within just a few years. However, its complex capital structure, involving more than 100 related entities, resulted in less than $10 million in readily available cash, making it vulnerable to economic changes.

Furthermore, Pine Gate pursued a vertically integrated strategy, combining project development, financing, and construction. However, after spinning off its construction division into a subsidiary in 2021, mismanagement and uncontrolled costs led to significant losses. This exacerbated cash flow pressures, forcing the company to invest even more capital in the construction division.

More importantly, the drastic changes in the external environment accelerated Pine Gate's collapse. The Federal Reserve's interest rate hikes significantly increased financing costs for photovoltaic projects, while the sharp policy shifts in 2024, particularly the reduction of subsidies for the solar industry and increased tariffs on photovoltaic products, rendered the company's business model unviable. Pine Gate's once-proud Sunstone Solar project faced extremely stringent deadlines and may ultimately fail to be completed.

Due to financing difficulties and policy changes, Pine Gate's confidence collapsed, its financing chain broke, and the company could not maintain operations. Although it attempted to seek bailouts before bankruptcy, due to its massive debt and complex capital structure, most potential investors withdrew, and it ultimately barely managed to stay afloat through bridge loans provided by lenders.

Pine Gate's bankruptcy exposed deep-seated problems in the US photovoltaic industry: an over-reliance on policy dividends and cheap capital expansion models, and a lack of endogenous revenue generation capabilities. As overseas media commentators have noted, this event symbolizes the bursting of the US green energy bubble.

The wild swings of policy

The collapse of Pine Gate Renewables was not an isolated incident. In recent years, federal government policies have fluctuated significantly, resulting in vastly different market environments for the photovoltaic (PV) industry at different stages.

In 2022, the Inflation Reduction Act (IRA) became a major policy development for the PV industry, providing historic support. This act not only extended the solar investment tax credit (ITC) and production tax credit (PTC) but also provided substantial subsidies to domestic PV manufacturers. However, the actual implementation of the policy fell short of expectations, with delays in details and approval processes preventing many companies from receiving subsidies as planned.

With changes in the political landscape, the federal government's support for clean energy has drastically reversed. The Big and Beautiful Act, passed in 2025, cut key subsidies and increased tariffs on PV products. This change rendered many PV projects uneconomical, especially for companies reliant on subsidies; the policy cliff deadline proved a heavy blow. For example, Pine Gate's Sunstone Solar project faces a strict deadline of securing financing and commencing construction by July 2026; failure to do so will result in the loss of all tax credit eligibility.

Besides the drastic changes in subsidy policies, the federal government's wavering in administrative regulation has also exacerbated industry uncertainty. In October 2025, the U.S. Department of the Interior revoked a key permit for a 6.2GW solar PV + energy storage project in Nevada, and the Department of Energy froze previously granted clean energy grants. These moves sparked widespread industry concern, with some state governors even jointly writing to request a reconsideration of the impact of policy changes, particularly the potential threats to power supply and grid stability.

While state government policy support varies, there is a clear divergence overall. Some states, such as California, have significantly reduced subsidies for distributed solar PV, while states like Texas have attempted to ensure grid stability by restricting renewable energy project access. However, state policy support is limited and faces issues such as grid connection and approval delays, leading to significantly longer project development cycles and increased costs and risks.

In summary, the U.S. solar PV industry has experienced a cycle of policy stimulus followed by cooling over the past three years. During the period of fiscal stimulus, the solar PV industry experienced explosive growth, but after the policy reversal, the industry entered a period of decline.

What is the foundation for the survival of solar PV?

The challenges faced by US-based solar PV developers extend far beyond the impact of policy fluctuations, and while these issues existed even during periods of favorable policy, they are now more pronounced in the current environment.

First, soaring financing costs are putting immense pressure on project economics. The Federal Reserve's interest rate hikes have significantly increased financing costs for PV developers, with many projects relying on floating-rate loans facing losses due to increased interest expenses. For example, NextEra Energy's partnership lost $40 million in 2024 due to high interest rates, compared to a net profit of $53 million in the same period last year.

High financing costs also make equity financing difficult, with the cost per kilowatt-hour for many projects nearly doubling, making it impossible to cover financing interest payments.

Second, lengthy grid connection and permitting processes are severely delaying project progress. US PV development faces the problem of "easy land acquisition, difficult grid connection," with large projects requiring long waiting lists and evaluations from grid operators, sometimes taking years.

For example, PJM Grid has suspended accepting new projects and plans to clear its existing pipeline during 2025-2026. Even projects that pass technical and economic feasibility studies may be indefinitely delayed due to federal land approvals or environmental lawsuits. The Esmeralda solar-storage project, requiring a complete overhaul due to policy changes near completion, reflects the severity of this issue.

High labor and manufacturing costs are also a major challenge. US solar construction costs are high, with hourly wages for engineering labor significantly higher than in Southeast Asia, directly driving up EPC costs. For example, at JA Solar's 2GW module factory in Arizona, labor and depreciation costs make manufacturing costs 20% higher than in Southeast Asia. Furthermore, due to the underdeveloped US solar supply chain, many key raw materials and components rely on imports, and increased tariffs and logistics costs further increase hardware costs. Although the IRA provides manufacturing subsidies, it cannot fully compensate for the cost disadvantage of domestic manufacturing.

Supply chain issues are also a challenge for US solar developers. To reduce dependence on China, the US government has implemented multiple restrictive policies, such as the Forced Labor Prevention Act, which has hindered customs clearance for imported modules and extended delivery cycles. At the same time, policies require developers to ensure supplier compliance, increasing the complexity and cost of procurement.

What is the progress of Chinese solar manufacturers' investments in the US?

Chinese solar manufacturers' investments in the US have shifted from aggressive expansion to cautious observation.

LONGi Green Energy, in a joint venture with US-based Invenergy, built a 5GW annual capacity module factory in Ohio, which began production in January 2024. It adopts an "Asian supply + North American assembly" model and enjoys IRA subsidies. However, after the "Big American Act" is enacted in 2025, restrictions on foreign ownership will tighten, and LONGi Green Energy is considering reducing its stake to ensure subsidy eligibility.

Jinko Solar is expanding its Florida factory to 1.2GW and has received IRA subsidies. The expansion is expected to be completed by the end of 2026. Jinko is restructuring its supply chain and considering meeting US market demand through "non-China manufacturing," but has not announced any new large-scale factory construction plans, maintaining a cautious approach.

Canadian Solar has invested over $250 million in a 5GW annual capacity module factory in Texas and an additional $800 million in a cell factory in Indiana, becoming the first Chinese company to expand cell production in the US. Its strategy combines self-construction with external sourcing, while closely monitoring the impact of the "Big American Act" details.

Trina Solar invested approximately $200 million in a 5GW annual module production plant in Texas, creating about 1,300 jobs. However, in 2024, it sold the plant assets to T1 Energy, reflecting its response to policy and market uncertainties.

Tongwei Co., Ltd. has not yet established a photovoltaic production plant in the United States, choosing instead to serve the US market through product exports. This is primarily due to the limited incentives provided by IRA subsidies for its polysilicon and solar cells. Furthermore, considering the uncertainties in US policies and markets, the company decided against investing in a factory in the US for the time being.