Auxin Solar: A look at the mysterious company causing a big trade mess

Auxin Solar, the tiny company whose trade petition is rattling the whole U.S. solar industry, produces solar panels of questionable quality in volumes that appear to be lower than claimed, sources tell Canary Media.

Last week, I reported on how Auxin’s petition has triggered the U.S. Department of Commerce to consider imposing tariffs on solar panels imported from Cambodia, Malaysia, Thailand and Vietnam, based on claims that Chinese manufacturers are funneling their wares through those countries to evade existing tariffs. If Commerce sides with Auxin, that could kneecap the solar industry in this country, as I discussed in an episode of The Carbon Copy podcast last week. The U.S. installs vastly more panels than it manufactures, and about 80 percent of imported panels currently being deployed in U.S. projects come from those four Southeast Asian countries.

Since publishing my initial article, I have spoken with a solar installer who has used Auxin panels, examined data on deployment of those panels in key U.S. markets, and again visited the site of Auxin’s sole factory, camera in hand. Here’s what I’ve learned about this little company that’s causing a big ruckus.

Auxin panels exhibit burn marks and other defects

Northern California solar installer Barry Cinnamon of Cinnamon Energy Systems was previously an Auxin customer — but not a happy one.

“They were our [original equipment] manufacturer at one point. Their quality was terrible,” he told Canary Media. There were ​“many module failures from their own manufacturing, and we were unable to get any warranty service. Broken glass, half output of panels, burn marks on the back. They sourced almost all of their components from overseas, some likely from China.”

Another solar installer reported similar complaints: ​“We are starting to get a couple of Auxin takedowns and reinstallations,” meaning the Auxin panels did not perform to expectations and had to be replaced. ​“We are also seeing some pretty heavy burn marks on the backs of the panels.”

Cinnamon shared photos of panels with burns visible on their backsheets. 

Cinnamon believes that the company has the capacity to produce only a few megawatts of solar panels per year in its current configuration and is performing much of the manufacturing work by hand. That stands in sharp contrast with Tier 1 module manufacturers, whose large factories are highly automated.

Auxin does not appear to be producing many solar panels

Auxin Solar, which was founded in 2008, claims its production capacity is 150 megawatts’ worth of solar panels a year. That’s a tiny fraction of the capacity of big panel manufacturers in China, which can produce 5 to 50 gigawatts’ worth of panels annually.

A manufacturer on the scale of Auxin is not big enough to be eligible to bid on supplying panels to utility-scale solar farms, said Solar Energy Industries Association President Abby Hopper. That means its primary market would be rooftop installations for homes and businesses.

But even a spot check of the data on these kinds of distributed solar installations in top U.S. markets casts doubt on Auxin’s claim that it’s producing anywhere close to 150 MW of panels a year.

California is by far the largest rooftop solar market in the U.S., and it’s Auxin’s home state. California shares statistics on distributed electricity generation in the territories of each of its three big investor-owned utilities, which serve the majority of the state’s households, including data on which companies’ solar panels are installed in projects that are part of the state’s net-metering program. In 2021, according to state data, 567 kilowatts of Auxin panels were installed in distributed solar projects in the territory of Pacific Gas and Electric, 26 kW in the territory of Southern California Edison, and none in the territory of San Diego Gas and Electric — that’s a cumulative total of less than 1 megawatt.

New Jersey, another top rooftop solar state, also shares data on the makers of solar panels used in its installations. Auxin’s biggest deployment year in the state appears to have been 2016, when 9,456 kW of its panels were installed. That same year, in California, 258 kW of Auxin panels went up in PG&E’s territory, 69 kW in SCE’s, and 41 kW in SDG&E’s. Altogether, that makes for a total of less than 10 megawatts in 2016 in two of the biggest rooftop-solar markets in the country.

Auxin Solar did not respond to a request for comment.

Auxin’s factory does not look like a busy place

In recent weeks, I’ve made three visits to the site of Auxin’s factory in San Jose, California, all on weekdays during regular working hours. It did not come across as a bustling hive of industry.

Here’s the building’s parking lot one weekday afternoon at around 2:00 p.m.:

There was no action at the graffiti-covered loading dock:

Aging wooden pallets were piled around: 

Part of the building facade appears to be crumbling:

An abandoned tire sat in the parking lot:

Someone had painted a plaintive message on a door:

Auxin is not the point, say some supporters of domestic manufacturing

But supporters of Auxin’s petition could argue that the company might be doing better if it weren’t being undercut by low-priced panels from Asia.

“The companies targeted in our petition advertise that they can evade U.S. tariffs imposed on dumped and subsidized Chinese products,” Auxin CEO Mamun Rashid wrote in a guest essay for Real Clear Energy in March. ​“This is blatant circumvention of U.S. antidumping and countervailing duty laws.” He concludes, ​“When the playing field is fair, American companies win. It’s time to give U.S.-made solar a chance once again.”

In response to my article last week, employees of other solar-panel manufacturers chimed in on Twitter to say that singling out Auxin misses the point. The attention, they contend, should be on whether U.S. trade rules are being followed and enforced, and on how to rebuild U.S. panel manufacturing capacity.

From Scott Moskowitz, head of market strategy and public affairs at Q Cells North America, a South Korea–owned manufacturer of solar panels with a factory in Georgia:

From Reuven Proença, a spokesperson for U.S. panel maker First Solar, tweeting on his own behalf:

“Friendly fire”

There’s no doubt that it’s a nearly insurmountable challenge for a small, scrappy U.S. manufacturer like Auxin to compete with Asia on a semi-commodity like solar modules.

But the success of U.S.-based panel maker First Solar proves it can be done. The company is now building a new factory in Ohio that will have the capacity to produce more than 3 gigawatts of panels annually. For what it’s worth, First Solar supports the adoption of incentives for solar manufacturing in the U.S., as well as keeping in place the existing tariffs on Chinese panels and eliminating the exemptions for bifacial panels.

Here’s the problem: Tariffs don’t work.

As we’ve said before, import tariffs are a blunt instrument and have a track record littered with unintended consequences. Trump-era tariffs on Chinese modules (which the Biden administration opted to extend) have contributed to the U.S. having some of the world’s highest utility-scale solar costs, and there’s little evidence that the tariffs have ​“leveled the playing field” in any meaningful way or spurred domestic panel production.

Why are Auxin’s size and reputation significant in this case? Because the company looks unlikely to succeed even if the Commerce Department imposes severe tariffs. It’s a tiny, lower-tier, non-automated manufacturer in an area with high labor costs, producing products of questionable quality. That’s why it’s uncompetitive, not because of China’s industrial prowess, or even its unfair trade practices.

And while it’s highly unlikely that the U.S. will ever be able to approximate a level playing field in its trade relationship with China, it’s absolutely certain that the U.S. will fail to build out enough solar capacity to achieve its aggressive decarbonization targets without imported modules.

Energy Secretary Jennifer Granholm wants to build out U.S. manufacturing capacity in the clean energy sector, but she seems less than enthusiastic about the current trade dispute. As Sammy Roth of the Los Angeles Times reported last week:

When I asked Granholm about the Commerce Department’s investigation, she lightly slapped her forehead with both hands and looked down in a gesture of frustration. She described the investigation as ​“friendly fire” on the administration’s clean energy agenda, and told me the Commerce Department needs to keep the investigation narrow and resolve it quickly.

Commerce Secretary Gina Raimondo ​“is looking at what can be done within the legal framework that exists,” Granholm said.

​“This is why accelerating the buildout of our own supply chains is so important,” she added.

Granholm used the metaphor of friendly fire, but a more apt one might be a circular firing squad. And the stakes couldn’t possibly be higher.