Is 2022 the year that launched the U.S. solar industrial revolution?

With the signing of an executive order by President Biden to boost America’s clean energy economy, coupled with the goal of attaining 100% carbon pollution-free electricity by 2030, there has been a push for increasing U.S. manufacturing across the solar supply chain. The Inflation Reduction Act (IRA) gives those manufacturers the shove they need to get going.

The IRA does a lot for the solar industry. It incentivizes people to go solar by offering a 30% investment tax credit. It offers what can amount to lucrative incentives to solar developers who use domestically manufactured solar equipment. And it offers credits to manufacturers who produce the much-needed domestic content.

Solar developers are now more than ever pushed to use domestic content, thanks to the significant “adders” that can raise the tax credit beyond 30%. For example, projects featuring a minimum amount of domestically produced content are eligible for another 10%. To reach that target, all steel and iron must be U.S. made and at least 40% of manufactured goods – solar panels, inverters, electrical gear – must also be U.S. made, with the latter percentage to rise in future.

And then there are the incentives for manufacturers. The IRA provides two types of tax incentives to encourage manufacturers to set up shop in the U.S. First there are production tax credits. The IRA includes an investment of $30 billion in production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries, and critical minerals processing. The IRA also has $10 billion for investment tax credits for those companies that build clean technology manufacturing facilities, including solar modules as well as electric vehicles and wind turbines. For more details on tax credits for solar manufacturers, see the DOE’s summary here.

Manufacturers respond

The U.S. Department of Energy has an interactive map that shows where in America the domestic solar supply chain is being built. This image of the map shows just module and wafer manufactures. When you click on the dot on the map, a text box lists the name of manufacturer, type of product, and manufacturing capacity.

Expect changes to this map in the coming months because, since passage of the IRA, several manufacturers have announced that they are either setting up module manufacturing in the U.S. for the first time or they’re expanding production.

Heliene is one module manufacturer who already had U.S. manufacturing plans in place at the time of the passage of the IRA. The opening of its 420 MW plant in Minnesota was announced in October, adding to the Canadian company’s existing 150 MW operation in the state. The facility is set to assemble monofacial and bifacial panels with half-cut cells. Construction of Heliene’s new facility had begun prior to the passage of the Inflation Reduction Act, so the company achieved operation without taking in the newly-established manufacturing tax credits. Heliene did, however, receive over $9 million in state and county funding.

In November pv magazine USA reported that Enel North America affiliate 3Sun USA is surveying the U.S. for locations to build a 3 GW bifacial solar module and cell manufacturing facility with plans to scale up production at the facility to 6 GW per year. While the location has not yet been disclosed, the company says that construction of the facility will begin in the first half of 2023, and production anticipated to begin by late 2024.

“Recent policy tailwinds from the Inflation Reduction Act have served as a catalyst for our solar manufacturing ambitions in the US, ushering in a new era of made-in-America energy,” said Enrico Viale, head of Enel North America.

Philadelphia Solar, a solar manufacturer from Amman, Jordan, announced last year that it plans to build a module factory in the U.S. That plan may be moving closer to reality, as Philadelphia formed a joint venture with Translucent Energy, called Trading Philadelphia Solar. The team plans to establish the U.S. manufacturing arm of Philadelphia Solar modules by the end of this year, with full U.S. production by 2024. First it will produce 400- and 530-Watt mono-PERC solar modules for residential and utility-scale markets, with plans to move into heterojunction technology in 2025. An announcement of the location was expected to come this month, but it has not been disclosed at this time.

In November, First Solar—already a leading U.S.-based module manufacturer—announced that it had selected Alabama for the location of its fourth module factory. Part of the company’s plan to scale its U.S. manufacturing footprint to over 10 GW_DC by 2025, the new factory represents an investment of approximately $1.1 billion and is expected to be commissioned by 2025, with a planned annual capacity of 3.5 GW_DC.

“The passage of the Inflation Reduction Act of 2022 has firmly placed America on the path to a sustainable energy future,” said Mark Widmar, chief executive officer, First Solar. “This facility, along with its sister factories in Ohio, will form part of the industrial foundation that helps ensure this transition is powered by American innovation and ingenuity.”

Wafers

In December, U.S.-based CubicPV, formerly 1366 Technologies, announced plans to establish 10 GW of conventional mono wafer capacity in the United States. Driven by incentives in the Inflation Reduction Act, the wafers produced by the new facility could fill a void in the domestic supply chain as well as create 1,500 new direct jobs.

“The IRA represents a titanic shift in the global solar landscape, and the U.S. is poised to become the world’s most competitive location to manufacture solar. We’re excited to have a role in the U.S. manufacturing renaissance while accelerating our business plan and supporting the development of our next generation tandem module technology,” said Frank van Mierlo, CEO, Cubic.

Set for takeoff

Certainly it will take some time for these manufacturers to ramp up production to meet the burgeoning demand in the U.S. market. In the meantime, solar installers have until June of 2024 to still purchase tariff-free solar modules manufactured in Cambodia, Malaysia, Thailand and Vietnam. The domestic content requirement in the IRA also comes with a few caveats, for example, an exception is made if domestic components are not available or if by purchasing domestic content raises project costs by more than 25%.

The IRA is considered by many to be the United States’ most significant clean energy industrial policy. The ten-year extension of the ITC will ensure a strong solar market for the next decade, giving manufacturers confidence that the U.S. is the place to be. The added incentives for domestic production will help boost manufacturing, closing solar supply chain gaps, and enable U.S. solar industry to become a global leader. Stay tuned as pv magazine usa continues to report on more domestic manufacturing moves in 2023.

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