Accounting
How American tax breaks brought a Chinese solar energy giant to Ohio
Nestled among the corn fields of Pataskala, Ohio, Illuminate USA’s sprawling new solar factory is buzzing. Hundreds of freshly hired local employees are hoisting pallets, soldering equipment and inspecting their work as sheets of glass are transformed into state-of-the-art photovoltaic panels. They’re collecting hourly wages that start at double the state minimum. The factory has also delivered contracts to area electricians and suppliers.
From the outside, these are the hallmarks of the 21st century clean energy manufacturing boom promised by the Biden administration, the result of sweeping incentives designed to restore national prowess in a market dominated by China.
In reality, what looks like a domestic triumph is also a win for America’s primary industrial and geopolitical rival. Invenergy, America’s biggest private renewable power developer, owns 51% of the plant. Longi Green Energy Technology Co., the Chinese solar giant, owns the other 49%, and it’s Longi’s panel-making expertise, technology and supply chain that are churning out tariff-free equipment for the U.S. market.
Inside the plant, signs in both English and Mandarin admonish workers to clean up trash. Machine displays also toggle between the two languages. More than 100 Chinese nationals are on site working alongside more than 1,000 American colleagues, and bridging the language barrier requires lots of hand gestures and smartphone-enabled translation. Illuminate says much of this is temporary, and most of the Chinese workers will leave once the Americans are up to speed.
But long after they return home, Longi will continue to profit. The joint venture benefits from millions in economic development incentives and federal tax credits for domestic clean energy manufacturing. For its part, Longi avoids anti-China tariffs and deepens its foothold in one of the
Companies based in or linked to China are replicating the strategy across the U.S. They are building or planning to build at least a dozen plants with 30 gigawatts of module-making capacity, according to a Bloomberg review of public statements, filings and other documentation. All told, the facilities would be able to supply roughly three-quarters of today’s U.S. panel needs. (BloombergNEF projects U.S. domestic demand for solar panels will be 45.5 gigawatts in 2024 and 50.4 gigawatts in 2025.)
American manufacturers are crying foul, saying these factories undermine their quest to build a domestic solar supply chain. Although other countries have taken advantage of the IRA’s subsidies, political objections have focused on Chinese investment. Bipartisan momentum is building in Congress to block China-backed firms from claiming tax credits for manufacturing anything central to the energy transition — a category that extends beyond solar panels to electric vehicles and batteries.
In Ohio, retired middle-school science teacher Eileen DeRolf has become an outspoken critic of Illuminate and the policies that brought it to Pataskala. She points to a 15-year tax abatement from the city and $4 million in incentives from a state economic development agency, to say nothing of the $350 million in potential annual tax subsidies from the Inflation Reduction Act.
“To me, this is betraying America, to allow an uneven playing field,” DeRolf said. “I happen to not particularly want our geopolitical No. 1 enemy to benefit off our economic system.”
Illuminate and its American and Chinese parent companies see it differently. They point to an influx of well-paying jobs and to a resurrection of manufacturing in a fast-growing sector of the economy.
“We’re a majority-owned American company,” said John Duer, Illuminate’s chief legal officer. “We have a minority partner based in China. We’re not a Chinese company trying to do business in the U.S.”
Executives at Invenergy and Longi had been talking about collaborating for years, but it took the Inflation Reduction Act — the 2022 law meant to jumpstart U.S. clean energy manufacturing — to spur them to action. Less than seven months after President Joe Biden signed the IRA, they
In addition to the tax credits Illuminate can claim for its U.S.-made panels, its parent companies reap significant benefits from the tie-up. Invenergy is the factory’s first and biggest customer, earning additional credits for using domestically produced components in its solar arrays. And Longi, like other Chinese panel-makers, brings advantages gained through decades of experience and generous support from Beijing.
In addition, the industry has been dogged by allegations that some suppliers
What no one disputes is that today Chinese companies dominate the market for solar panels and all of their component parts.
For environmental advocates, China’s cheap panels have been a boon, driving a more than 50-fold increase in emissions-free solar power generation globally since 2010. But to American rivals, something more nefarious was at work. They argued Chinese solar companies were selling their products below cost to unfairly corner the market, and trade authorities agreed, kicking off a cycle of tariffs meant to level the playing field.
Today, steep U.S. tariffs have effectively killed domestic demand for made-in-China solar panels. Companies, including Longi, first responded by shifting operations to other Asian nations, spurring another round of trade probes and enforcement. By producing panels in Ohio, Longi steps out of this game of
(The estimate is based on the average price in September for panels exported to the U.S. ($0.25 per watt), Longi’s share of Illuminate’s planned annual production capacity (5GW) and a potential combined antidumping and countervailing duty rate for Malaysian modules exported to the U.S. of 25%. Note: Any final
Combined with the incentives from the IRA, Longi and other panel-makers can “make huge profits,” said Yana Hryshko, chief solar analyst at consulting group Wood Mackenzie. After surviving two decades of industry turbulence, these “are not stupid companies,” she said. “They will not make a move without being confident.”
On a June Friday morning, job-seekers started to gather at the Perry County, Ohio, career center well before Illuminate’s recruitment event was scheduled to begin. Many of the plant’s workers come from outside Pataskala, including areas hit hard by the collapse of coal mining.
A job at the plant would mean a longer commute for Tricia Tilley, a 47-year-old janitor and church secretary. It would also nearly double her income and provide health insurance for her and her teenage son.
As for the company’s ties to China? “I know they’re from another country, but they’re here trying to put money into our country,” she said. “As long as it’s a good job and they’re paying everybody — keeping on the up-and-up — I don’t see any problem with it. Follow the rules like everybody else, we’re cool.”
Right now, Illuminate depends on the expertise of Chinese workers who’ve spent years handling specialized module-making machinery and brittle crystalline silicon cells. For many, it’s their first time outside of China, drawn by higher salaries and a sense of adventure.
“We’re here just to teach the American workers,” said Li, a production line technician who asked to be identified by her family name because she wasn’t authorized to speak to reporters. “When they can start a production line by themselves, there’ll be no need for us to be here anymore.”
Li’s days begin with a video chat around 5 a.m., a chance to talk with her children in China before a company shuttle takes her from suburban Columbus to the factory. Many of the Chinese workers at Illuminate work 12-hour shifts, six days a week, logging 60% more hours every month than the plant’s typical American employees.
Longi’s expats went through language training, though most rely on translators to communicate with their trainees. They also got a crash course in American culture, with advice to avoid commenting on race, skin color or body type. Li said her American colleagues have been kind.
“I hadn’t been out of China before. Now I get to come out and take a look,” she said. Li pegged her timeline at “two or three years. After that I’ll go back. Then I can say I’m a person who has been to the United States!”
Illuminate is leaning into its heartland identity. Its website touts its role “investing in Ohio” and “onshoring America’s supply chains.” It’s partnering with local high schools for a robotics challenge and also has sponsored the
DeRolf and other local skeptics deride these efforts as a charm offensive, albeit an effective one. It’s made it “ever so much more difficult to get this town and the people to pay attention to what we’ve got in that building,” DeRolf said.
Like DeRolf, activists in Mesquite, Texas, are taking aim at a $270 million plant that began producing panels late last year. Some 1,400 Texans now work at the factory owned by Canadian Solar Inc. — and while the company’s corporate headquarters are in Ontario, most of its directors and much of its manufacturing reside in China.
Foreign direct investment has always been critical to countries trying to build domestic industry. In the late 1990s, China, for its part, welcomed Western automakers, providing access to its growing market while learning from their decades of experience.
“Most of the companies that are building solar panels right now that have the know-how or skills are Chinese,” said Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies. They also have well-established supply chains outside the U.S. At Illuminate, for example, panels are made with photovoltaic cells and glass from Malaysia and aluminum frames from Vietnam.
Many key materials aren’t yet produced domestically, and Illuminate says it’s actively working to expand its U.S. supply base.
The promise of the Inflation Reduction Act was that “you’re restoring the American industrial base,” said Nathan Picarsic, the founder of consulting group Horizon Advisory, which has investigated Chinese supply chain dominance and the use of forced labor. But as more Chinese-backed solar companies operate on U.S. soil, it betrays “the story that we’re telling ourselves about the manufacturing renaissance.”
The clash reverberates beyond solar to the fast-growing field of electric vehicles and battery manufacturing, also subsidized by the Inflation Reduction Act. In rural northwest Michigan, the town government is opposing an electric vehicle battery factory planned by a subsidiary of China’s
In Virginia, Governor Glenn Youngkin discouraged Ford Motor Co.’s interest in building an electric vehicle battery plant with China’s Contemporary Amperex Technology Co. Ltd. in the state, calling it a “
Licensing is one way the U.S. can tap Chinese manufacturing expertise and technical know-how while retaining more control over operations, said Mazzocco. Regardless, the issue is a flashpoint for politicians — and is fueling bipartisan efforts in Congress to bar companies with ties to China and other so-called “foreign entities of concern” from claiming the IRA’s manufacturing tax incentives. (It’s also a way lawmakers could try to offset spending in the next budget fight.) The Treasury Department could also move unilaterally to impose restrictions on what projects qualify for the credit.
Cory Ford, a school bus mechanic in the Pataskala area, doesn’t share his community’s embrace of the Illuminate plant. He doesn’t want U.S. taxpayer dollars to benefit Chinese industry; he’s also concerned that the firms could leave as quickly as they arrived. After all, Chinese companies have become expert at rapidly relocating in response to unfavorable tariffs or taxation.
“We’ve given so much in subsidies and government funding,” he said. “When that runs dry, how quickly is that building going to empty out?” And, he asks, what happens to the local American workers left behind?
Illuminate isn’t going anywhere, Duer said, even if Washington puts the manufacturing subsidies outside of reach: “We would adjust. Nothing is fatal. Nothing can’t be overcome. The fact of the matter is, we’re here to stay.”
Artificial intelligence has indeed led tech-forward firms (including those in this year’s
On the positive end, firms such as the Texas-based Franklin Alliance reported that adopting AI technology has dramatically increased their capacities as bots take on repetitive manual tasks with an ease and a speed far past more conventional automation setups, allowing accountants to focus more on higher value tasks.
“What’s been most impressive about the AI tools we’ve explored is their ability to dramatically reduce the time spent on repetitive, manual tasks—things like document summarization, data extraction, and even early-stage tax prep. In the right context, these tools create real efficiency gains and allow our team to shift focus to higher-value advisory work,” said Benjamin Holloway, co-founder of Texas-based Franklin Alliance.
madedee – stock.adobe.com
For some, like Illinois-based Mowery & Schoenfeld, these efficiencies have been most impressive on the internal administration side, with AI effectively taking care of the non-accounting work that nonetheless keeps many firms afloat, especially where it concerns meetings.
“Truly most impressive and a huge time savings for us has been AI’s ability to record and summarize Team meetings. Circulating notes and reducing administrative burden on such activities has freed up much capacity, both for our admin side and for partners or management who are not able to be at every meeting,” said Chris Madden, director of information technology.
Others, like top 10 firm Grant Thornton, emphasized AI’s benefits in client-facing activities and noted that it has been especially meaningful in its risk advisory services at least partially due to the firm’s recently-launched CompliAI tool, designed specifically for this area.
“The tool uses generative artificial intelligence and was developed using Microsoft technology, including Microsoft Azure OpenAI Service. CompliAI’s ability to quickly analyze vast datasets and identify potential risks has proven invaluable in combining Grant Thornton’s extensive global controls library with generative AI models and features, including AI analysis, ranking and natural language processing capabilities. As a result, our employees can run control design and assessment tasks in minutes, versus days or weeks. This means clients enjoy faster operational insights, which could amount to a new level of efficiency and a path toward transformative growth,” said Mike Kempke, GT’s chief information officer.
Another positive frequently mentioned, such as by top 25 firm Cherry Bekaert, has been the accessibility and ease of use for many AI solutions even for those without strong technical capacities. Assurance partner Jonathan Kraftchick said this means they did not need to wait long before they began seeing results.
“The most impressive aspect of AI has been its ability to add value with minimal ramp-up time. Many of the tools we’ve implemented have a low barrier to entry, allowing users to start experimenting and seeing results almost immediately. Whether it’s drafting content, conducting accounting research, summarizing meetings, normalizing data, or detecting anomalies, AI has consistently helped accelerate tasks and enable our teams to focus on higher-risk or higher-value areas,” he said.
Several firms, such as California-based Navolio & Tallman, also mentioned improvements to broad strategy and ideation, saying it’s been good for enhancing creativity and accelerating the early stages of their work.
“We’ve still seen value in AI as a jumping off point for ideas and strategy. It’s been helpful for brainstorming, drafting early versions of client communications, and supporting high-level planning conversations,” said IT partner Stephanie Ringrose.
Inconsistencies, inaccuracies, insufficiency, and insecurity
At the same time, firms over and over again said that while the strength of AI comes in handling simple jobs, it often lacks the precision and consistent accuracy needed for higher value accounting work. While it can certainly generate outputs at an industrial scale, trusting that those outputs are correct is another story for firms like Community CPA and Associates.
“AI is incredibly useful for certain types of tasks, such as summarization, data extraction, answering simple questions, drafting communications or documentation, brainstorming ideas, or serving as a sounding board. However, we have observed that most AI tools we’ve tried have difficulty with complex tasks that require lots of context, precision, or domain-specific knowledge. Oftentimes in these cases, AI tools will generate responses that are overly confident or wrong and are missing key information due to not being integrated with other systems or software we have,” said CEO Ying Sa.
Some, like top 25 firm Armanino, noted that these challenges mean that humans need to devote considerable time to ensuring the quality of AI outputs and intervening when the programs go off track.
“The primary disappointment stems from the occasional inaccuracies or biases inherent in AI-generated outputs, commonly referred to as ‘hallucinations,’ necessitating continuous human oversight to ensure reliability. Addressing these inconsistencies remains an ongoing challenge,” said Jim Nagata, senior director of cybersecurity and IT operations.
Top 25 firm Eisner Amper’s chief technology officer Sanjay Desai noted that these issues with accuracy and consistency can be found across AI solutions, though noted that the technology is still quite new and so many things are still in the process of being refined.
“The lows come from the gap between what’s possible and what works reliably in practice. We still need strong guardrails to define valid inputs and outputs, especially in sensitive use cases. Technologies like retrieval augmented generation (RAG) haven’t yet delivered the accuracy or consistency we need when working with proprietary or domain-specific data. Even in mature areas like audio-to-text transcription, we see issues—particularly with accurately identifying speakers in multi-person meetings, which affects the quality of recaps and follow-up actions. In short, while LLMs have come a long way, making them enterprise-ready still requires ongoing human oversight, thoughtful implementation, and continuous refinement,” said Desai.
Another issue reported by several firms was what firms like Navolio & Tallman saw as ongoing security risks from AI solutions that limits their ability to apply the technology to more sensitive use cases.
“The overall attention to security and privacy is still more limited than our industry requires, vendors have not yet aligned their pricing models with the impact their tools make to the business, and vendors still oversell their AI capabilities,” she said.
Top 25 firm Citrin Cooperman also noted–among other things–that the security of these solutions could stand to improve.
“The overall attention to security and privacy is still more limited than our industry requires, vendors have not yet aligned their pricing models with the impact their tools make to the business, and vendors still oversell their AI capabilities,” said chief information officer Kimberly Paul.
Another issue with AI that firms have reported is that solutions today don’t seem to integrate especially well with other programs, which limits the ability of these solutions to work across multiple systems in a single coherent workflow–under such conditions, AI solutions can wind up being siloed from the very areas it is needed the most.
“We believe one of the biggest gaps in current AI solutions is the inability to integrate into other AI solutions to work collectively across one process or workflow. There are many cases where one AI solution is very good at a specific task, while another is very good at another process or task, but the gap is the ability to integrate those solutions together to solve for an entirety of a process or a workflow,” said Brent McDaniel, chief digital officer for top 25 firm Aprio.
There is also the matter of data integration, which is needed for AI systems to gain a more holistic understanding of a firm’s needs. Without such integrations, AI becomes more limited in its ability to develop insights and provide actionable guidance, according to Tom Hasard, IT shareholder for New Jersey-based Wilken Gutenplan.
“We wish AI tools could fully synthesize all of our internal data and unique expertise—beyond the scope of general internet search—and provide detailed, context-specific answers for our team. In the near term, we envision an internal system that taps into our accumulated knowledge to assist staff in resolving complex client problems more quickly. Over time, this capability could be extended to give clients direct, on-demand access to our specialized insights, effectively scaling our expertise and delivering value in a more immediate and personalized way,” he said.
Beyond just data, lack of integration also limits the ability for AI to address complex problems due to lack of cross-disciplinary expertise, according to Kempke from Grant Thornton.
“Current AI solutions lack the deep cross-disciplinary expertise to be able to solve complex issues. AI today is optimized for specific fields and tasks but when it comes to solving problems that span multiple disciplines such as Tax, Legal and Finance, the current solutions are not yet capable of providing meaningful advice and guidance. Grant Thornton is already working with various AI partners on this issue and targets to be a very early adopter of the next iteration of AI that addresses this,” he said.
The AI wishlist
Many firms hoped that the next generation of AI solutions would address these sorts of problems in a way that will allow them to become true assistants capable of taking on complex tasks that require extensive judgment.
“We have found that AI currently lacks in the ability to replicate human creativity and complex decision-making. While AI excels at data analysis and task automation, it struggles with tasks requiring creativity and nuanced judgment. If AI could offer more sophisticated support in areas such as accounting and audit services, its value and impact in our daily lives would be significantly enhanced,” said Jim Meade, CEO of top 50 firm LBMC.
Desai, from Eisner Amper, also pointed out that AI isn’t very good at handling bad data, which is a problem considering that AIs run on data. This means that using AI effectively today still requires a great deal of data processing and sanitation to make information useful. If humans did not need to do so much manual cleanup to get data AI-ready, it would help make the technology even more efficient.
“One of the biggest gaps in AI today is its limited ability to handle bad data. Since data is the foundation of any AI strategy, it’s a challenge that most organizations still face— dealing with messy, inconsistent, or unstructured data. We wish AI could do more to identify, fix, and improve data quality automatically, instead of relying so much on manual cleanup,” said Desai.
Finally, Avani Desai, CEO of top 50 firm Schellman, said that AI needs to not only be safer, it needs to be visibly so, as trust and confidence in the technology is often key to adoption.
“I wish that AI could de-risk itself so that clients would be more open to using it and build client trust. If AI could more clearly demonstrate safety and responsible use, adoption would be much easier. Once people understand it’s here to help—and learn to use it responsibly—the fear will fade,” she said.
Representative Nicole Malliotakis said increasing the state and local tax deduction cap to $30,000 from $10,000 would reduce the tax burden of the vast majority of people in her district, indicating support for a proposal that is dividing Republicans.
“Every member needs to advocate for the particular needs of their district. Tripling the deduction to $30,000 will provide much-needed relief for the middle-class and cover 98% of the families in my district,” Malliotakis, a Republican representing Staten Island, New York and a member of the House tax committee, said in a statement to Bloomberg News on Friday.
Malliotakis’ nod of approval for a $30,000 SALT deduction cap comes as Republicans are fighting among themselves about how high to increase a tax break that has the potential to scuttle President Donald Trump’s entire tax package.
House Speaker Mike Johnson on Thursday said the $30,000 write-off limit is one of several options being discussed. That figure was rejected by several other New York Republicans, including Elise Stefanik, Nick LaLota, Mike Lawler and Andrew Garbarino. California’s Young Kim also rebuffed the idea.
Malliotakis’ district has less expensive property values and lower incomes than some of the other lawmakers pushing for a SALT expansion, making it politically viable for her to accept a lower cap than some of her colleagues.
White House Press Secretary Karoline Leavitt suggested on Friday that Trump would not weigh in on an appropriate level for a SALT cap, leaving it to lawmakers to resolve.
“There’s a lot of disagreement on Capitol Hill right now about the SALT tax proposal, and we will let them work it out,” she told reporters.
House Republicans’ narrow majority means that Johnson needs to win the support of nearly all his members to pass Trump’s tax-and-spending package.
Several of the SALT advocates have said that they are willing to block the bill unless there is a sufficient increase to the deduction. However, most members have not publicly stated how high the deduction must be to win their support.
The debate over SALT has proved to be a particularly thorny fight because it is a political priority for a small but vocal group of Republicans representing swing districts critical to the party maintaining a majority in the 2026 midterm elections.
Expanding the write-off is an expensive proposition, and Republicans have little fiscal wiggle room as they are sparring over ways — including cuts to Medicaid and levy hikes on millionaires — to offset the cost of the tax-cut package.
The House Ways and Means Committee is slated to consider the tax portion of the bill on Tuesday, including SALT changes.
House Republicans are considering increasing taxes on university endowments, a significant threat to some of the nation’s wealthiest schools as President Donald Trump seeks to tighten control over American higher education.
The measure is in a draft of the tax package Republicans are weighing, according to people familiar with the matter who spoke on condition of anonymity to share details on the effort. The proposal would create a tiered system of taxation so that wealthy colleges and universities pay more as the size of their endowment grows, the people said.
Republicans are considering boosting the 1.4% endowment tax currently on the books to rates as high as 14% to 21%, a person familiar with the matter said.
The bill is not finalized, however, the people cautioned, and the draft could change as Republicans negotiate its terms, a complex task as the party looks to renew and expand tax breaks and find ways to pay for them with only a narrow House majority.
Targeting university endowments would be a major escalation of Trump’s fight with elite colleges and universities, which has seen the administration demand changes to school policies that reflect his priorities.
The current tax on private-school endowments ensnares many of the richest universities, like Harvard University and Yale University, as well as smaller elite institutions such as Amherst College and Williams College. Some of the wealthiest private colleges in the country boast endowments of at least $500,000 per student.
Harvard, in particular, with a $53.2 billion endowment, has been locked in a high-stakes fight with the Trump administration over its demands for changes at the school. Harvard has sued several U.S. agencies and top officials for freezing billions of dollars in federal funding. Trump has also threatened the school’s tax-exempt status, though experts say revoking that designation would be a lengthy process involving the Internal Revenue Service and the courts.
A new
The poll found that 62% of Americans support maintaining federal research funding, 72% believe “liberals, students and professors can speak freely to at least some extent,” and 84% are concerned at some level about the cost of tuition, an issue Trump has not focused on.
Trump’s 2017 tax package, which Republicans are moving to renew, implemented an endowment levy of 1.4% on net investment income, similar to one that private foundations pay. That levy generated more than $380 million from 56 colleges or universities in 2023 — though it affected just a small fraction of the 1,700 private, nonprofit US schools.
House Budget Committee Chairman Jodey Arrington floated a long list of possible budget cuts in January that included raising $10 billion over 10 years by raising the endowment tax to 14%.
Discussions over the Republican tax package are reaching a critical stage. Trump is meeting Friday with the chair of the House Ways and Means Committee — the chamber’s tax-writing panel, according to people familiar.
Trump and Representative Jason Smith will discuss the draft proposal. The committee is expected to release parts of the bill later this afternoon and the rest of the draft on Sunday night or Monday, the people said.
One of the people familiar cast the effort as a bid by Republicans to ensure that universities spend their endowments on their students and not on other initiatives disfavored by conservatives, such as diversity, equity and inclusion efforts or on challenging the Trump administration’s policies.
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