Sector Spotlight: Solar PV Supply Chain
In this post, I will explore how the DOE (Department of Energy) Loan Programs Office (LPO) is supporting the U.S. solar photovoltaic (PV) supply chain.?
Solar energy is crucial to meeting the Biden-Harris Administration’s goals to achieve a carbon-free grid by 2035 and reach net zero emissions economy-wide by 2050. DOE estimates solar could account for as much as 40% of the nation’s electricity supply by 2035 and 45% by 2050.?
One factor behind the success in solar deployment is its low cost. After decades of innovation and cost reductions, solar is the lowest-cost form of electricity generation in an increasing number of locations around the globe. DOE anticipates PV costs will continue declining; a 60% reduction in PV energy costs by 2030 could be achieved via improvements in PV efficiency, lifetime energy yield, and cost.?
As solar PV plays an increasingly large role in supplying power, U.S. manufacturing of solar modules and their component parts (silicon wafers, ingots, and cells) is poised for tremendous growth. The solar industry already employs the most people of any energy generation sector: over 340,000 people as of 2023. DOE estimates that number may rise to 500,000 to 1,500,000 people by 2035.?
The Biden-Harris Administration’s Inflation Reduction Act?(IRA) has spurred a flurry of announced solar module assembly projects––nearly 50 GWdc of annual manufacturing capacity. More than 35 newly operational solar factories have been announced since the passage of the IRA, resulting in more than $3 billion in investments and creating 9,500 American jobs. These facilities produce modules, inverters, trackers, electrical balance of systems equipment, field installation tools, and other critical solar supply chain components. Total domestic PV module manufacturing capacity is estimated to reach about 40 gigawatts (GW) by 2026.? ??
Based on an estimated annual domestic PV demand for 2025 to 2030 of about 50 GW a year, domestically produced modules can supply up to 80% of this demand. To meet the Biden-Harris Administration’s goal of a decarbonized grid by 2035, solar deployment must ramp to 100 GW a year by 2030, and domestic manufacturing will need to continue to rise to meet this growing demand.?
The IRA's inclusion of the Advanced Manufacturing Tax Credit, also known as 45X or the MPTC, provides tax credits for key components of domestically manufactured solar PV systems, including modules, mounting structures, and inverters. The IRA also includes bonus credits for domestic content, the guidelines for which were recently clarified by U.S. Department of Treasury.?
Upstream, cell, wafer, and polysilicon plants are starting to ramp as well. These facilities are typically more capital intensive and have longer construction timelines than module assembly facilities. Wafers are expected to remain undersupplied in the near-term, but more domestic producers may enter the market as domestic cell manufacturing ramps up. Low-carbon, domestically sourced polysilicon production will also be supported by growing demand.??
There will be significant foreign direct investment into building out manufacturing capacity in the United States, which enables knowledge transfer and best practices for state-of-the-art solar manufacturing. This investment will train U.S. workers on how to operate modern, large-scale solar manufacturing plants, which have not operated in many years, and build out the knowledge ecosystem of solar manufacturing.??
As the solar PV Tech Talk mentions, LPO is working to strengthen domestic solar PV manufacturing and deployment by providing access to debt capital for qualifying projects across the supply chain, from materials processing through installation. LPO can provide low-interest loans for U.S. projects, making domestic manufacturing more cost-competitive, especially when paired with tax credits and other manufacturing incentives provided in the IRA.?
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LPO can support solar PV manufacturing projects through a number of avenues. One route is the Title 17 Clean Energy Financing Program,?which includes financing opportunities for innovative energy and supply chain projects and projects that reinvest in existing energy infrastructure. Eligible applicants can also apply through the Tribal Energy Financing?Program, which offers financing to federally recognized tribes and qualified tribal energy development organizations for energy development projects.?These projects do not have an innovation requirement and can include manufacturing or deployment of commercial PV technology.?
As of August 2024, requested financing from LPO for solar PV projects via active loan applications totaled over $4.3 billion. Cell and module production accounts for nearly $3 billion of the total amount requested. For more current details, view LPO’s?Monthly Application Activity Report, which explains the level of interest from applicants for LPO financing and what technology sectors have been most actively engaged with LPO.?
Solar PV – Qcells?
In August 2024, LPO announced a $1.45 billion conditional commitment to Qcells, a leading North American crystalline silicon solar manufacturer. The loan guarantee will?support Qcells’ solar supply chain facility?in Cartersville, Georgia, which will produce ingots, wafers, cells, and?finished solar panels. The project is expected to create approximately 1,200 construction jobs and will support, upon completion, 1,950 full-time operations jobs in Cartersville, Georgia.??
The facility will be the largest ingot and wafer plant ever built in the United States and will reestablish?critical parts of the domestic solar supply chain and reinforce the United States’ status as a global clean energy leader. The factory will also be the first fully integrated silicon-based solar manufacturing facility constructed in the United States in over a decade, helping address gaps in the domestic solar manufacturing supply chain.?
The project will also help build the U.S. solar industry while reshoring production capacity for solar components that are largely produced in China and Southeast Asia, boosting domestic supply chain resilience, and helping lower costs for customers and communities across the United States.?
The solar panels produced by the Cartersville factory will be used for distributed and utility-scale projects. Qcells is also one of the ten largest utility-scale project developers for both solar and storage in the United States with over 2 GW of projects developed or constructed and a project development pipeline of 10+ GW. The company has entered into an 8-year, 12 GW solar and engineering, procurement, and construction (EPC) agreement with Microsoft to be fulfilled with solar panels made in Cartersville.
For more information on solar projects supported by DOE, visit Solar Manufacturing Map | Department of Energy.?
Product Manager in clean tech working to support the transition to a 100% electric and renewable energy future.
2 个月As I read this article, the next one that follows is from US EIA, which says the US is the lead exporter of gasoline. Let’s flip the script on this and turn the US into the lead exporter of solar PV modules!
Service Writer
2 个月Sunnova works with a company that defaulted on paying the contractors they hired and closed up their branch where I live. Their contractors damaged my property and put a lien on my house. Never mind the fact that after construction began, Sunnova changed the contract three different times. Their customer service rep told me they paid their bill to the contractor they hired, and I am on my own to pay the subs their contractor hired. This has been on going since January 2024 and they are closing my complaint as resolved. Their contractor left a leg of power loose and demanded I turn on the system. As a result my main breaker melted and my main breaker panel was melted. These issues are still present as they close the case on my customer service concern. Sunnova refused to get involved until the system was commissioned. Then they told me it is my problem.
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2 个月Let’s go NOVONIX!!!
Community Solar Senior Consultant
2 个月Our solar development firms always purchased American made modules because we benefited from the dependable relationship and added value American company offers( co- marketting, innovation and market intelligence) in the supply chain. The manufactures also helped us innovate and reduce “ soft costs” on the projects. The American solar manufacturers did have challenges to compete so I am thrilled that the investments from the Inflation Reduction Act are being deployed. Being product independent from China is good for American workers, the solar industry and consumer. Investments in the solar industry has always paid off over the past 25 years and this is a continuation. Solar and wind are the most cost effective source of electricity over the past 10 years and this is why it is the fuel of choice for new electricity in America.
Renewable Energy & Storage Leader Driving Sales Excellence and Sustainability Innovation | 25+ Years of Success
2 个月That’s fantastic news on the module front! The same thing needs to happen for LDES (long duration energy storage). With U.S. based manufacturers like Eos Energy Storage, using around 90% domestic content, we need to and will get there.!