A Chinese billionaire is teaming up with the most powerful man in the U.S. Senate to build a solar plant in a dusty corner of Nevada, even as officials accuse China of driving energy companies out of business by dumping cheap components on the American market.
ENN Group plans a manufacturing and generating facility worth $5 billion, more than all Chinese investment in the U.S. combined last year, in Laughlin, Nev., a town pockmarked with foreclosed properties and the skeleton of a 14-story resort abandoned when the project went bankrupt.
Company founder Wang Yusuo, one of China’s richest men, has joined with Senate Majority Leader Harry Reid to win incentives including land 113 miles southeast of Las Vegas that ENN is buying for $4.5 million, or less than one-eighth of the $38.6 million assessors say it is worth. The project has produced legal work for Reid’s son, Rory, a lawyer at a Las Vegas firm that gave the Nevada Democrat more than $40,000 in the past three election cycles.
This is counter to most logic, said Thomas Maslin, an analyst at IHS Emerging Energy Research in Washington, D.C. It doesn’t make sense in terms of supply and demand. The likely rationale is that because they’re building on public land they need to justify somehow the price through job creation and high- tech manufacturing.
ENN’s project highlights the growing clout of Chinese capital in this country. Chinese investment in the U.S. jumped to 66 deals worth $4.5 billion in 2011, up from just 11 deals worth $146 million in 2003, according to the Rhodium Group, a New York-based firm that researches trade with China.
While it is rising quickly, that total is still far lower than countries such as Switzerland, whose $42 billion infusion makes it the top foreign investor, according to a July report from the U.S. Commerce Department.
Solar panel prices have plunged almost 50 percent globally in the past 15 months, leading to the bankruptcy of equipment maker Solyndra, with $535 million in U.S. government loan guarantees, and job cuts at other solar manufacturers.
The Obama administration, under pressure to curb Chinese companies’ trade practices, imposed preliminary duties on March 20 of as much as 4.73 percent on solar equipment imported from China.
Tariffs may prompt more Chinese companies to move their manufacturing facilities to the U.S., Maslin said.