Maxeon Solar Technologies has selected Albuquerque, New Mexico as the location for a silicon solar cell and module factory. This decision highlights the significant industrial policy measures outlined in the Inflation Reduction Act (IRA).

By establishing this extensive manufacturing facility, Maxeon is spearheading the push to revive the US solar manufacturing industry.

Maxeon’s Return to America

Maxeon inherits the technological expertise of SunPower, a pioneering US solar company from which it separated in 2020. SunPower, founded in Silicon Valley in 1985, initially gained recognition for its world-record solar cell performance. This is a technological advantage that Maxeon maintains.

SunPower previously manufactured solar panels and cells in the United States. However, SunPower faced cost pressures from Chinese-made products offered by its competitors, prompting the company to shift production overseas. Now, Maxeon aims to reclaim SunPower’s US manufacturing roots.

The proposed 3-gigawatt facility requires an investment surpassing $1 billion. However, Maxeon emphasizes that it must gain approval from the US Department of Energy’s Loan Programs Office to finalize project financing.

If the loan is secured, Maxeon’s facility will become one of the largest expansions in domestic solar manufacturing since the groundbreaking IRA passed in August of last year. Currently, Maxeon manufactures its products in Mexico, Malaysia, and the Philippines.

Maxeon wants to expand its US manufacturing operation to achieve an annual capacity of 4.5 gigawatts. By way of comparison, the entire US solar industry produced 5 gigawatts of solar panels in 2022.

The completed facility will employ up to 1,800 individuals.

The Impact of the IRA

Solar power has experienced significant growth in the United States, becoming the fastest-growing form of electricity generation. However, this growth has relied on the importation of millions of solar panels.

To encourage domestic manufacturing, the IRA introduced lucrative solar subsidies. This led to the establishment of new solar manufacturing facilities and expansions of existing ones.

Companies like Qcells and First Solar have already chosen sites and begun construction for new factories. Others, like Enel, have expanded their current facilities.

The aim is to increase the production capacity of solar panels in the US. First Solar aims to produce 10 gigawatts’ worth of panels annually by 2025. Meanwhile, Qcells plans to have a solar panel production capacity of 8.4 gigawatts by 2024 in the state of Georgia alone.

Overall, more than 30 new solar manufacturing facilities or expansions have been announced since the passage of the IRA. When these plants are completed, the US could have a combined annual capacity of over 70 gigawatts. This is over six times more than the current manufacturing capacity of 11 gigawatts.

The generous tax credits provided by the IRA incentivize manufacturers to produce solar modules in domestically integrated plants. In these domestically integrated plants, all components are sourced from within the US.

The IRA’s subsidies cover approximately half the manufacturing cost of a solar module. This makes solar panel manufacturing an attractive opportunity for businesses.

In some cases, manufacturers can benefit further if the government is involved in providing loans. For instance, Maxeon is awaiting approval for a loan from the Department of Energy to construct a new facility.

If the loan is approved, Maxeon will begin construction on its Albuquerque plant in early 2024. Panel production will commence in 2025.

Image Source: RenewableEnergyWorld,