The current state of U.S. polysilicon production

From pv magazine 03/25

U.S. solar module manufacturing has grown fivefold since supportive legislation passed in 2022. Over that time, 70 new solar and energy storage manufacturing facilities have come online and 47 are under construction, according to the Solar Energy Industries Association (SEIA).

Solar manufacturers have announced $36 billion of U.S. investment since 2023, which will create more than 44,000 jobs. Those announcements would bring total annual solar module capacity to more than 50 GW, plus 49 GW of cells, 24 GW of wafers and 13 GW of ingot production.

Module assembly from imported cells has been the initial focus, but fully “made in America” solar would require U.S. polysilicon. The nation has only two operational polysilicon sites today, but President Donald Trump’s willingness to use tariffs, plus anticipated rising demand for PV, could make polysilicon production an attractive proposition.

SEIA estimates the technically challenging development of polysilicon production sites requires around five years. Marius Mordal Bakke, vice president for solar research at Norwegian consultant Rystad Energy, said REC Silicon’s Moses Lake fab in Washington state took two years and around $150 million to restart after closing in 2019. It is ceasing production again after struggling to meet the purity requirements of the latest silicon cell technologies.

Moses Lake’s biggest shareholder, Hanwha Solutions, terminated a 10-year supply agreement due to an inability to meet “requirements at the correct levels.” Hanwha, also the parent company of PV manufacturer Qcells, planned to supply its U.S. factories from the facility. It will instead take polysilicon from fellow South Korean business OCI’s Malaysian fab.

REC Silicon, which still produces silane gas at Moses Lake, must hope for alternative poly offtakers. “It is feasible they would resume production since the required investment would be far less than starting a new project,” said Bakke.

U.S. incentives

Michael Parr, executive director the Ultra Low-Carbon Solar Alliance (ULCSA), said polysilicon production “ties up capital for a long time before you have a product.”

Chinese poly giant GCL passed over the option of U.S. manufacture in 2023. Joint CEO Lan Tianshi said U.S. production was at least five times more expensive than in China, even accounting for Inflation Reduction Act incentives, and regulatory requirements delay construction. “U.S. policies are attractive but not attractive enough,” he said.

German headquartered Wacker Chemie and Hemlock Semiconductor are currently the only two U.S. producers of solar-grade polysilicon. Wacker has a site in Tennessee while Hemlock, owned by U.S.-based Corning Inc. and Japan’s Shin-Etsu Handotai, has a fab in Michigan.

Tennessee’s Highland Materials in 2024 said it had secured $256 million in “48C” advanced energy project tax credits to build a polysilicon site. Its location and expected commercial operations date are yet to be announced.

Domestic demand

Bakke estimated the 33,000 metric tons (MT) of annual production capacity at Wacker and Hemlock’s sites would be enough to supply around 13 GW of solar modules, based on 2.5 grams of polysilicon required per watt of module generation capacity. New-generation cells, however, may require only 2 grams/W or less thanks to a focus on thinner cells and reducing production waste.

Polysilicon market observer Bernreuter Research said several factors have led to the fall in polysilicon consumption per cell: decreased wafer thickness, kerf loss reduction, rising cell efficiency, and use of half-cut cells. The research firm noted that polysilicon consumption per gigawatt of PV module capacity in 2023 was only a quarter of what was needed per gigawatt in 2006. Polysilicon facilities in the United States may also be able to increase their production capacity as demand grows.

“If you call the U.S. a 40 GW to 50 GW market, and account for 20 GW [of non-silicon based] thin-film [solar modules], we have plenty of western poly to cover U.S. wafer/cell production.”

Tariffs

President Trump has issued an executive order adding an additional 10% tariff to goods from China, effective Feb. 4, 2025, which means solar energy resources, including polysilicon, imported from China are now subject to 60% tariffs under Section 301 of the U.S. Trade Act of 1974. That will raise prices for Chinese solar-grade polysilicon. It should have little effect on solar prices, however, as very little polysilicon is imported into the United States, and the small amount that is comes from Germany and Malaysia.

“For future trade, it would still be cost-effective for newly established U.S. ingot and wafer manufacturers to purchase Chinese polysilicon, even with the tariff, as long as it complies with UFLPA regulations,” said Bakke, referencing the Uyghur Forced Labor Prevention Act, which affects imports from the Xinjiang region where a large polysilicon production base is located.

An industry note from Roth Capital Partners indicated President Trump could soon initiate a new investigation on behalf of the U.S. polysilicon industry to determine the effect of imports on national security, a move that may drive import prices higher still. Rystad’s Bakke said pricing for non-Chinese polysilicon was around $18 per kg to $25 per kg. Chinese polysilicon costs slightly above $5 per kg, as of February, he said.

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