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To gauge the growth of domestic content in the solar energy supply chain, Anza shares the outlook for domestic content in the second quarter of 2025 amid uncertainty. Anza, a subscription-based data and analytics software platform, released its Q2 2025 Domestic Content Insights report , revealing trends in domestic manufacturing of solar modules and battery energy storage systems (BESS). While only four months have passed since Anzas last report, dramatic shifts in U.S. domestic content and trade policy prompted Anzas strategic sourcing team to reach out to manufacturers to update the platform with solar module and energy storage system pricing and availability, including tariffs brought on by the International Emergency Economic Powers Act (IEPA) tariffs and Section 301 duties. Analysts at Anza point out that the dramatic political changes have resulted in price uncertainty for manufacturers, developers, and buyers, which may cause buyers to delay purchasing decisions or reevaluate sourcing strategies. Domestic production strategies continue to evolve in response to changing market conditions and regulatory updates. Manufacturers are actively adjusting their domestic content plans. Some are accelerating U.S. production lead times to take advantage of domestic content incentives and avoid tariff exposure. Boviet Solar, for example, just opened a module plant in North Carolina and plans to add cell production next year. ES Foundry is already producing cells at its new plant in South Carolina. Anza noted that other manufacturers have canceled previously announced plans due to financial or logistical constraints. In February, Premiere Energies, an India-based cell manufacturer, halted plans to manufacture 1 GW of cells in the United States amid uncertainty. That same month, Freyer Battery abandoned plans to build a battery factory in Georgia. (Freyer later rebranded as T1 Energy and announced it will become a vertically integrated solar and battery storage provider based in Texas, following its acquisition of Trina Solars U.S. manufacturing assets.) Solar modules and cells According to the Solar Energy Industries Association (SEIA), since the passage of the Inflation Reduction Act of 2022, there have been more than 100 new solar and storage manufacturing announcements, with 84 new solar and storage manufacturing facilities coming online, and 55 facilities under active construction. Anza says the availability of U.S.-assembled modules is expected to fluctuate in the coming years, while the number of suppliers producing both U.S.-made cells and modules is expected to gradually increase. U.S.-assembled refers to the final module being assembled in the United States. All U.S.-made cells are also assembled in the United States. The good news for the solar supply chain is that numbers are increasing for both modules and cells, although there is still more module manufacturing than cell manufacturing because cell manufacturing requires a greater investment in time and financing. In the Q1 report, there were 12 suppliers with modules assembled in the U.S. and seven with cells. The Q2 report shows 17 module suppliers and five cell suppliers. Expectations also increase over time for modules, but not as much for cells. While the Q1 report expected 12 module suppliers in the second half of 2025, the current report shows 18. However, the number of cell suppliers has dropped from the seven forecast in the last report to the current five, unchanged from the first half. The chart below shows that it will take until the second half of 2027 for the number of cell suppliers to reach double digits. However, the gap is expected to narrow by then, with 18 module suppliers versus ten cell suppliers. Anza noted that the temporary increase to 20 suppliers in the first half of 2026 shown in the graph above reflects a short-term commitment that some manufacturers are unwilling to extend beyond. Similarly, the drop in the second half of 2026 and the first half of 2027 may be due to a lack of willingness to commit. The recent tariff announcements are also prompting suppliers to be more cautious about long-term projections, Anza said. Most importantly, Anza projected a 100% increase in U.S.-made solar cell production, going from five suppliers in the first half of 2025 to ten in the first half of 2027, indicating a growing commitment to integrating U.S.-made cells into module production. Battery energy storage systems (BESS) Anza tracked individual containers, modules, and cells, which, an Anza spokesperson explained to pv magazine , provided insight into the phases of domestic manufacturing adoption and their alignment with IRS guidelines. For example, each component of a battery energy storage system contributed points under IRS Notice 2025-08, which helps projects meet domestic content qualification thresholds. This report revealed that the BESS sector is experiencing rapid growth in domestic manufacturing. The first quarter of 2025 report predicted that by the second half of 2025 there would be two fully domestic suppliers of cells, modules, and containers. Anza now forecasts that there will be three BESS cell suppliers, seven BESS module suppliers, and seven BESS container suppliers. Forecasts more than triple those of battery cell suppliers from the second half of 2025 to the first half of 2027. Domestic module production is expected to increase by 267% over the same period. Container suppliers will more than double their production between the first half of 2025 and the second half of 2027. Price dynamics of solar cell and module manufacturing As in the previous quarter, domestic solar modules are in high demand and short supply. Suppliers are charging a premium for fully domestic cells assembled in the United States, compared to imported cells. According to Anza, the high demand is due to manufacturers wanting to take advantage of incentives and mitigate tariff risk. The second-quarter report showed a slight price increase (4.3%) for cells from December to March, driven by tightening supply. However, Anza noted that the cost of modules combining imported cells with U.S.-assembled options has not risen as anticipated. On the contrary, prices have generally flattened and even declined 0.4% from December 2024 to March 2025, potentially due to buyers demanding higher domestic content points, which only modules with U.S.-made cells can provide. Imported modules experienced a price decline of 6.7% between December 2024 and 2025. Anza cautioned that current price data extends through March 2025 and does not reflect the effects of new tariffs. Uncertainty surrounding universal and reciprocal tariffs will likely drive prices higher. The company also noted that the trends highlighted in this report are based on current supplier commitments and are subject to change as policies and market dynamics evolve. |
