July 17 (Reuters) - Construction of U.S.

solar-manufacturing plants by Chinese companies is surging,

putting China in position to dominate the nascent industry, as

other American factories struggle to compete despite federal

subsidies.

Chinese companies will have at least 20 gigawatts' worth of

annual solar panel production capacity on U.S. soil within the

next year, enough to serve about half the U.S. market, according

to a Reuters analysis of corporate statements, government

documents, and interviews with eight companies and researchers.

The group includes seven purely Chinese-owned companies-

Jinko Solar, Trina Solar, JA Solar

, Longi, Hounen, Runergy, and Boviet,

according to the analysis.

The projected rapid increase in U.S. solar panel

production by Chinese-owned companies has not previously been

reported, and represents a worrying result for President Joe

Biden's climate agenda. While his administration is keen for new

investment that creates U.S. jobs in clean energy, his

government is also desperate to prevent over-reliance on

geopolitical rival China as the economy transitions from oil and

gas to renewables.

Chinese-backed companies have distinct advantages over

competitors in the U.S., such as heavily subsidized supply

chains for raw polysilicon and unfinished solar modules, as well

as low-cost government financing. Like non-Chinese companies,

they also collect U.S. subsidies for clean energy manufacturing

embedded in the 2022 Inflation Reduction Act, Biden's signature

climate law.

"You have a stacked deck here. It's hard to imagine that

anyone, particularly a greenfield manufacturer, can do it as

quickly as a Chinese manufacturer," said Paula Mints, founder of

solar industry research firm SPV Market Research, referring to

new factories.

She and one other researcher added, however, that the

Chinese investment would help the domestic solar manufacturing

industry mature while creating jobs.

"They have a lot more experience building factories and

setting up supply chains," said David Feldman, a solar market

researcher with the U.S. Department of Energy's National

Renewable Energy Laboratory.

Local and state officials in places where Chinese firms are

setting up factories, including Texas, Arizona, Ohio and North

Carolina, have welcomed the investments.

'WE NEED AMERICAN MANUFACTURERS'

Non-Chinese manufacturers in the United States, by contrast,

have found it hard to compete against a flood of cheap imports

and are worried by China's outsized presence. As many as half of

the announced U.S. factories may not materialize, Reuters

reported last year.

U.S.-based Convalt, for example, is struggling to bring

online 10 GW of U.S. capacity at a factory it started building

in upstate New York in 2022.

"If we are to succeed, we need American manufacturers like

Convalt to survive this onslaught of low prices, to build

factories with capacities that allow us to compete against the

largest global firms, with Chinese beneficial ownership,"

CEO Hari Achuthan said in May in testimony to the U.S.

International Trade Commission, a government agency that is

considering a request by Korea's Hanwha Qcells and other U.S.

manufacturers to impose new tariffs on some solar imports.

Convalt's plant would make panels plus the cells, wafers

and ingots that go into them, but progress stalled a year ago as

global panel prices plunged 50% to levels below Convalt's cost

of production, he said.

"Had we not had these low prices we should be up and running

today," Achuthan said.

The Department of Energy told Reuters that developing a

domestic solar supply chain would take time and that the U.S.

must rely on foreign businesses for their expertise.

'COMMITTED TO BE HERE'

Chinese companies, by far the top suppliers of solar and

electric-vehicle battery components imported to the U.S., now

account for one-fifth of the solar factories announced since the

U.S. adopted new climate subsidies, according to research firm

Wood Mackenzie.

The United States has tried to ease its import addiction to

Chinese solar products with tariffs, and has also banned goods

linked to China's Xinjiang region over concerns about forced

labor. It is now considering new duties on components made in

other Asian countries where Chinese manufacturers have set up.

Chinese companies building factories in the U.S. so far are

mainly investing in module production, in which solar cells

imported from Asia are assembled into panels.

Longi, the world's third-biggest solar producer, for

example, is pumping out panels in Pataskala, Ohio through a

joint venture with U.S. clean-energy developer Invenergy called

Illuminate USA. The five-gigawatt plant is among the largest

announced since passage of the IRA, and the company is also

exploring the possibility of building a cell facility.

Trina, the No. 4 global manufacturer, plans to start a

five-GW panel factory in Texas this year, and is also planning a

cell facility.

"We are committed to be here and we are spending a lot of

time and money to make that a reality," said Mike Nelson, head

of legal for Trina's North American business.

While Chinese producers face opposition from U.S.

manufacturers, panel-buying U.S. project developers interested

in low-cost supply welcome them.

The American Clean Power Association, a clean-energy trade

group, said the United States solar-manufacturing sector is

attracting global investment and noted that the plants are

creating thousands of jobs.

Top U.S. producers, Hanwha Qcells and Arizona-based First

Solar ( FSLR ), are pushing for the U.S. to impose new tariffs

on component and equipment imports from countries where their

Chinese rivals have built factories to supply the U.S.

"We're just asking for legitimate U.S. manufacturers to have

a chance to compete with these gigantic Chinese-owned

companies," said Tim Brightbill, attorney for the American

Alliance for Solar Manufacturing Trade Committee, the group

seeking new tariffs.