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A SEIA White Paper on solar technology manufacturing and storage includes an interactive map showing that the momentum has already begun.
The vision and goal of the Solar Energy Industries Association (SEIA) is that by the end of this decade, the United States will be the most competitive and collaborative solar and energy storage industry in the world, and that will be achieved with a workforce made up of US workers and their allies. In the White Paper “American Solar and Storage Manufacturing Renaissance: Managing the Transition Away from China”, the SEIA notes that the shift away from over-reliance on solar power imports is just beginning. And while we wont completely abandon global markets and supply chains, momentum will go to the point where we can reduce our dependence on China for solar and energy storage equipment and raw materials.
The SEIA reports that the United States has the capacity to produce many of the key elements for the solar industry: metallurgical grade silicon, polysilicon, steel, aluminum, resins, racks and supports, and other key materials. There is already a modest capacity in the country to produce modules, inverters and trackers, and a limited supply of specialty glass. However, other items have almost completely disappeared from the US supply chain, such as bullion, wafers and solar cells.
The Inflation Reduction Act (IRA) provides substantial incentives for the development of American manufacturing, and has effectively stimulated several companies to announce their intention to establish domestic manufacturing facilities.
However, construction takes time and for the next few years we will continue to rely on imports to drive the rapid deployment of solar energy systems required for the energy transition.
The largest source of solar cells and modules is currently Southeast Asia, with manufacturing facilities run by top-tier manufacturers that have demonstrated the quality, financial stability, and compliance necessary to underwrite the product warranties consumers demand americans.
While sourcing from Southeast Asia is preferable to China, it means the United States remains indebted to other countries to help drive our energy transition. This presents risks, as attested to by the supply chain problems that manufacturers in Southeast Asia have faced in recent years. According to the SEIA, the best way to limit risks and build more resilient supply chains is to significantly expand domestic manufacturing.
The SEIA estimates IRA-stimulated manufacturing announcements will amount to 47 GW of new modules, more than 16 GW of cells, more than 16 GW of ingots and wafers, almost 9 GWac of inverters, and well over 100 GWh of manufacturing of batteries (serving both the solar and electric vehicle industries).
The SEIA also estimates that we can anticipate more than 20,000 tonnes/year of domestic polysilicon capacity coming back online and a multitude of new investments in tracker capacity and structures. And this is just the beginning: SEIA foresees exponential growth in all these sectors.
Planned schedule.
Source: SEIA
As the chart above shows, it will take some time before domestic manufacturing fills the gaps throughout the domestic supply chain. Polysilicon production, for example, will take until the fall of 2025 before US output is sold to domestic ingot and wafer makers. And it will be after that date that we start to see some capacity in domestically produced ingots, wafers and cells. Meanwhile, US module makers will have to resort to imported ingots, wafers and cells. Similarly, inverter manufacturers will have to import chips, capacitors and transformers before factories backed by the CHIPS and Science Act of 2022 come online.
As we shore up the domestic supply chain, the SEIA warns that manufacturers will need access to components, materials and consumables, which will require multiple sources and suppliers. In the short to medium term, we will continue to rely on imports, but bringing more robust solar manufacturing to the United States will avoid some of the risks the industry has faced over the last three years from heavy import reliance. |
