U.S. solar manufacturing boom “real — but fragile,” said CEA

The United States is now the third-largest solar module manufacturer in the world, and more growth is on the way.

Clean Energy Associates (CEA) projects that the U.S. will reach 13 GW of solar cell manufacturing production and 65 GW of module manufacturing by the end of 2025.

The cell target is particularly impressive, as Suniva and ES Foundry are the only two plants currently producing cells in the U.S.

The expansion of U.S. solar manufacturing capability has been driven by trade barriers and domestic incentives. For developers, these policies have made domestically produced PV modules attractive both in terms of security of supply and by virtue of attractive subsidies.

CEA said the solar factory boom is “real — but fragile. While domestic cell and module capacity continues to expand, developers and manufacturers remain cautious amid policy uncertainty and enforcement risks tied to Inflation Reduction Act tax credits.”

“I think almost the whole industry is waiting to see how the Trump government is working out, what details they change on the IRA is important,” said ES Foundry Chief Executive Officer Alex Zhu.

ES Foundry in January held a ribbon cutting event for its 1 GW solar cell manufacturing plant in South Carolina, which it said will expand to 3 GW by Q3 2025.

CEA said an additional roughly 10 GW of cell capacity is under construction or in a late stage with likely operational dates in 2026, with potential for more “stealth” cell plants in development for module suppliers planning in-house cell procurement.

In addition to the 65 GW module assembly total, CEA said 7 GW of additional factory capacity remains under construction or in a late planning stage. Another 5 GW of plans in negotiation are “at risk,” said CEA, given “foreign entity of concern” rules targeting Chinese-owned factories.

CEA said suppliers are still planning to generate about 84 GW of additional module factories and 90 GW of cell capacity. However, many plans are not progressing quickly.

“Policy uncertainty under a new administration remains a risk for new factories, which are banking on either manufacturing incentives to support competitive cost levels or developer incentives to support adequate demand levels for new factories,” said CEA.

Cell producers are currently incentivized through the Inflation Reduction Act (IRA) by a tax credit of $0.04/W. There is an additional domestic content bonus tied to a 30% Investment Tax Credit (ITC), plus a further 10% if certain quotas of U.S.-made components are incorporated into a solar project.

Cuts to the ITC “would significantly alter the whole investment in the industry. There are so many options that are on the table, it’s difficult to predict. Of course, we will want to keep the 45X or keep the domestic content,” said Zhu.

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