Solar

Is U.S. solar cell manufacturing viable?

Is U.S. solar cell manufacturing viable?
A Summit Ridge Energy community solar project located in Momence, Illinois using domestically manufactured Qcells modules (courtesy: Summit Ridge Energy)

A domestic solar supply chain has been slowly strengthening in the U.S. on a steady diet of Section 45 Advanced Manufacturing Production Tax Credits (courtesy of the ever-nutritious Inflation Reduction Act), but the viability of solar cell manufacturing in the United States is still up in the air.

Swiss solar panel maker Meyer Burger dampened recent progress today after announcing the cancellation of a planned 2 GW facility at a former Intel semiconductor site in Colorado.

“The planned construction of a solar cell production facility in Colorado Springs, Colorado, USA, is no longer financially viable for the company due to recent developments,” read part of a statement released by Meyer Burger. “The project will therefore be discontinued.”

Meyer Burger said it would delay releasing its latest financial results until the end of September or later, as management draws up a program for “comprehensive restructuring and cost-cutting.” In March, the company announced the closure of a plant in Freiberg, Germany. The plan (for now) will be to utilize Meyer Burger’s production facility in Thalheim, Germany as the company’s primary maker of solar cells.

Meyer Burger will continue to operate its 1,400 MW module assembly facility in Goodyear, Arizona, which started production earlier this year, but will pump the brakes on expanding that site, noting the facility is capable of supporting 2 GW or more in the future.

“Under the current market conditions, these [German] solar cells are the most economical option for supplying the module production in Goodyear,” noted the press release.

Meyer Burger isn’t the only company that has changed course on constructing a stateside solar facility. In February, CubicPV’s Board of Directors axed plans for a 10 GW wafer factory blaming “market dynamics,” construction costs, and a “collapse in wafer pricing.”

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Can we make solar at home?

The U.S. has plenty of places that assemble solar modules, but domestic production of components that comprise them is extremely limited. Only three companies are currently known to make polysilicon here- Hemlock in Michigan, Wacker in Tennessee, and REC Silicon in Washington, which produces materials for QCells. However, there are several intriguing U.S. facilities planned or already under construction that may ultimately prove we can make solar at home cost-effectively.

Canadian Solar opened a module plant in Mesquite, Texas last year, and is building a 5 GW solar cell facility to support it in Jeffersonville, Indiana.

Earlier this month, Heliene and India manufacturer Premier Energies announced plans to produce an annual capacity of 1 GW of n-Type cells at a plant near Minneapolis, Minnesota. Heliene currently sources solar cells from Premier’s Hyderabad facility for its module manufacturing operation in Mountain Iron, MN. Heliene is also partnering with NorSun, the only remaining ingot and wafer producer in the Western Hemisphere, on a 5 GW wafer factory in Tulsa, Oklahoma which is expected to open in 2026.

The only other known planned ingot and wafer site comes courtesy of Qcells in Cartersville, Georgia, set to be the first fully integrated silicon-based solar manufacturing facility built in the United States in more than a decade (and its largest ever). First announced in January 2023, the plant will make up to 3.3 GW annually of larger-format wafer sizes for distributed and utility-scale projects.

In January of 2023, Qcells announced a $2.5 billion investment in Georgia, the largest clean energy manufacturing investment in U.S. history, per the company. Qcells completed an expansion of its Dalton, Georgia factory last October, increasing its output to 5.1 GW in the “first solar panel plant expansion since the passage of the IRA.”

“The Inflation Reduction Act and the efforts of Georgia’s economic development team helped make these ambitious plans possible,” explained Qcells CEO Justin Lee. “As we build new solar technology from Dalton and prepare for the start of Cartersville, it is critical that our local to federal leaders continue to work not only with us, but the larger industry to ensure our collective investments deliver for communities for decades to come.” 

Qcells has hitched its cart to tech giant Microsoft, agreeing to a deal to supply them with 12 GW of solar modules and EPC services over 8 years. This includes a 2.5 GW module and EPC services commitment previously announced in January 2023. The two companies will collaborate to bring an estimated 1.5 GW of solar panels per year to projects Microsoft has contracted through 2032, which serves the needs of both parties- Microsoft’s total carbon emissions have risen by nearly 30% since 2020, according to its latest Environmental Sustainability Report. That is bad news for a company aiming to be carbon-negative by 2030, prompting Microsoft and similar companies to invest heavily in clean projects to earn Renewable Energy Credits offsetting their carbon output.

The price of importing solar

By the end of 2024, a US-made solar panel will still cost almost three times as much as one produced in China, according to BloombergNEF research. Without much of a manufacturing backbone, the United States can only compete with Asian imports by utilizing tariffs on imported goods and by incentivizing ones made at home (see the IRA).

The “recent developments” cited by Meyer Burger and the “market dynamics” blamed by CubicPV likely have to do with solar imports.

Two weeks ago, President Biden increased the tariff-rate quota (TRQ) on solar cell imports to 12.5 gigawatts (GW) from 5 GW. That means U.S. manufacturers can import up to 12.5 GW of cells per year before hitting the threshold for paying a 14.25% tariff. The move was applauded by many in the solar industry, including Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA).

“This move provides an important bridge for module producers to access the supply they need while the United States continues to progress on solar cell manufacturing,” she said of raising the TRQ on cell imports. “This decision will help create a strong, stable module manufacturing sector that can sustain robust cell production in the long run.”

In the short term, the move provides domestic manufacturers some cost certainty. Earlier this year, a report monitoring the industry issued by the U.S. International Trade Commission found that the tariff safeguard measure has resulted in positive adjustments from the domestic industry in light of increased actual and planned module production; various announcements of planned domestic cell production; and improvements in several of the domestic industry’s financial, trade, and employment indicators. In September of last year, most of the major players in the domestic solar industry petitioned the Biden administration to modify the safeguard by either eliminating the TRQ entirely or increasing it to 20 GW per year.

Meanwhile, The American Alliance for Solar Manufacturing Trade Committee, represented by Wiley Rein LLP, has filed critical circumstances allegations with the U.S. Department of Commerce concerning surges of imports from Vietnam and Thailand that it argues are “injuring the U.S. solar industry.” The imports, specifically, are crystalline silicon photovoltaic cells, whether or not assembled into modules, from Vietnam and Thailand. 

Earlier this year at Suniva’s Norcross, Georgia cell plant, Treasury Secretary Janet Yellen said she is “Concerned about global spillovers from the excess capacity that we are seeing in China.”

“China’s overcapacity distorts global prices and production patterns and hurts American firms and workers, as well as firms and workers around the world,” she added.