What are the chances that the U.S. can manufacture the majority of the solar panels needed for the domestic clean energy revolution?
Well, given the passing of the Inflation Reduction Act, the chances are really high.
Are there challenges to solar panel manufacturing in America? Of course.
Can the U.S. meet these challenges and provide high quality solar modules at a competitive price to a market with domestic content requirements? My answer is yes.
Here’s an informative article by Emma Penrod in Utility Dive on this very subject.
Shortly after President Joe Biden took office and began to develop his Build Back Better plan, leading solar companies formed the Solar Energy Manufacturing for America Coalition, or SEMA, lobby for industry-wide domestic content standards. But they didn’t have to lobby for long. The Inflation Reduction Act, which included many of the provisions the coalition hoped to see become law, was something of a dream come true — and it happened far earlier than anyone had thought likely.
With the IRA now in force and awaiting some implementation clarifications from the IRS, SEMA’s work, it seems, is just beginning. There’s no shortage of demand for renewable energy, and leading solar companies have begun to roll out major manufacturing expansion plans in the U.S. However, crafting the domestic solar energy supply chains of the future will require ongoing, concerted effort by industry and policy leaders — potentially up to five years before factories are up and running at scale, according to some industry experts.
But after that, domestic solar manufacturers will have an established platform from which they might pursue other goals, such as developing new solar technologies, according to SEMA Coalition Executive Director Mike Carr.
Kicking U.S. manufacturing into high gear
Creating incentives for domestic manufacturing, whether in the form of the IRA or something else, was a critical first step toward building more stable supply chains with less reliance on China, Carr said. Although solar companies had considered the benefits of investing in manufacturing, he said, nobody had any plans prior to the IRA to move forward with major expansions in the U.S.
“The consensus was nothing was to happen, nobody was going to build anything,” he said. As the IRA began to look more certain last year, some companies began to fill in the details of what their own manufacturing facilities might look like. Some had even worked on a bit of site selection and had conditional plans in place. “They were able to say, if this passes we can build X,” Carr said. “And when it finally passed, that’s when everything kicked into high gear and the scramble started.”
The early announcements triggered by companies that had conditional plans in the works prior to the IRA have already exceeded “even my optimistic take,” Carr said. But he indicated that SEMA, through its membership, has a line of sight on even more manufacturing announcements expected to take place throughout the first quarter of 2023.
“Now that the political back and forth is behind us, people can get down to business,” Carr said.
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