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A recent report from the Solar Energy Manufacturers Coalition for America (SEMA) shows that with stronger early-stage support, U.S. module makers would be less dependent on imports from Chinese companies for obtain materials.
SEMAs “ Inflection Point: The State of US PV Solar Manufacturing & Whats Next ” report highlights the need for change politicians to further support the US solar supply chain.
The Inflation Reduction Act (IRA) has motivated solar module manufacturers to build production plants in the United States. However, there are very few factories planned for the production of ingots, wafers and cells. This shortage leaves American solar module manufacturers beholden to imports, primarily from China.
“Thanks to the efforts of Congress and the Administration, with the Inflation Reduction Act we have the opportunity to build a strong, sustainable U.S. supply chain for solar energy that ensures our country is not dependent on China for this energy resource.” critical,” said SEMA Executive Director Mike Carr. “This report shows that if we truly want a clean energy future in this country, we will require a sustained, whole-of-government effort that does not allow our trade adversaries to derail the offshoring effort.” ”.
The report notes that China produces most of the polysilicon and wafers needed to make solar modules: 99% of the worlds solar wafers and more than 80% of the worlds polysilicon. Photovoltaic manufacturing consultancy Exawatt, now part of CRU Group, reported that the only notable center for ingot and wafer production outside China is in Southeast Asia, with a capacity of 35 GW of wafer facilities, which could be expanded to 45 GW by the end of 2024.
SEMA believes that offshoring the entire solar supply chain is important for energy security and preventing the U.S. solar industry from experiencing disruptions to the global supply chain, as occurred during the height of the pandemic. Furthermore, offshoring the entire supply chain creates jobs and ensures stricter labor standards are applied, as well as the use of cleaner production methods.
The IRA includes domestic content tax credits; however, it also excludes the origin of polysilicon and wafers. The SEMA report calls on policymakers to establish “strict rules for obtaining tax credits for using domestic content and federal procurement, in order to incentivize investment in high-value and capital-intensive parts of the supply chain, such as the production of wafers and polysilicon.” The authors of the report see it as necessary to apply the Uyghur Forced Labor Prevention Law and anti-dumping trade laws, which they consider necessary to equalize the conditions of domestic producers.
In addition to policy changes and trade enforcement, SEMA recommends that the U.S. government lead by example by insisting that power producers from whom the government purchases power must purchase solar modules with components made in the United States.
“Solar energy manufacturers in the United States are performing well below their full potential because the government is facilitating over-reliance on China and failing to provide a level playing field to help drive investment and innovation,” Carr said. “CHIPS Act and the IRA changed the game in the tools they provided to the Administration, but they must use the tools to their full effect to break Chinas monopoly by offshoring the entire solar supply chain.”
The US solar supply chain is in its early stages, with polysilicon facilities currently in Michigan, Tennessee and Washington, which the SEMA report said could produce enough polysilicon to manufacture about 20 GW of crystalline silicon products annually. However, the country has few facilities to manufacture ingots, wafers and cells.
“These manufacturing phases are the most capital intensive and yet the least incentivized by IRA provisions,” the report notes.
With greater support for the early stages of the process, American module manufacturers would be less dependent on imports of these materials from Chinese companies.
Along with Qcells and Norsun, Convalt Energy, which manufacture wafers in the United States, CubicPV and Indias Vikram Solar have announced plans to install in the country. It is not clear whether the announced factories will materialize or not. Exawatts head of photovoltaics, Alex Barrows, is sceptical.
“I think we will have a little bit [of ingot and wafer capacity] in the United States, but nowhere near what has been announced,” Barrows says. “35 GW of capacity has been announced by the end of 2026, but I would actually suspect that between 15 GW and 20 GW is more likely to be installed.”
Suniva is a company that plans to start producing solar cells at its Georgia plant, and Heliene just signed a three-year contract with Suniva, with plans for American-made modules. Suniva is restarting a factory it idled in 2017 when it filed for bankruptcy, saying it couldnt compete with cheap solar imports. SolarWorld joined Suniva in filing the Section 201 trade petition that led the Trump administration to impose tariffs in 2018 on imported solar cells and panels for a period of four years.
US Treasury Secretary Janet Yellen recently visited the Suniva factory, joining SEMA in calling on the Biden administration to level the playing field for the solar industry by expanding the definition of what constitutes domestic content for include previous materials.
“We cannot have a sustainable solar manufacturing sector in this country until we break Chinas monopoly on wafer supply, which gives no alternatives to cell manufacturers,” Carr said. “Just as the authors of the IRA intended.” in Congress in recent letters, Treasury should break this monopoly and encourage U.S. wafer manufacturing by refining its guidance for the IRA domestic content premium. We hope they do it quickly.” |
