- DOE has recommended incentives as a way to encourage a significant growth of local solar PV manufacturing in the US
- Financial support to local producers of PV technology can help offset 30% to 40% higher cost of domestic solar production
- Credits under tools like the ITC should be revised and extended, according to the factsheet
- It recommends coordinating trade policy across the US government to create fair conditions for the local industry and its workers
Taking a cue from its Chinese counterpart, the US government has figured incentives are one way to ensure significant growth in local solar PV manufacturing to offset higher cost of manufacturing in the country, according to the Office of Energy Efficiency and Renewable Energy (EERE) under the Department of Energy (DOE).
This is a major point of a deep-dive assessment on solar PV manufacturing in the US, one out of 7 such assessments released by the EERE on clean energy manufacturing supply chains within the country. The assessments delve into the need and opportunities for various technologies to help the current President Joe Biden led administration achieve its net zero carbon emissions goal by 2050 and ensure clean energy transition.
According to the Solar Energy Supply Chain Fact Sheet released by the EERE, companies that produce and sell solar components will require financial support to offset the 30% to 40% higher cost of domestic solar production.
The assessment sees an opportunity to develop an effective kerfless method of solar wafer manufacturing as expansion of ingot and wafers outside China would create demand for existing US polysilicon producers to run at higher capacity. Reminiscing the US as ‘once the world leader’ in silicon solar cell technology, the department believes the experience can be leveraged to help start domestic cell production.
As for modules, the factsheet lays significant stress on cadmium and tellurium (CdTe) thin-film technology where it mentions First Solar, which is the largest US solar module producer currently. Since this is a silicon free production process, the department believes the US can expand CdTe module production depending on material availability ‘with little risk of being overtaken by low-cost foreign competition’.
For module assembly, the factsheet specifies a cluster of module manufacturers exists in Alabama, Florida, and Georgia signaling an opportunity to grow a competitive supply chain of module components in the region.
The factsheet also touches upon mounting structures for solar modules which it believes can save on international shipping when produced locally, however rising raw material prices have led ‘multiple firms to decrease US production’.
As for PV inverters, it points out the local industry depends heavily on companies headquartered in Europe and Japan, but adds that since there are currently no international standards for inverters, the country that establishes them will have a ‘first-mover advantage’.
Along with incentivizing the industry, EERE recommends strategies for executive congressional action, particularly emphasizing on enacting legislation to provide tax incentives including for building new facilities and to support ongoing operation of those facilities. The government should specially prioritize silicon ingot and wafer production.
It wants the government to encourage domestic solar adoption and deployment by extending and revising credits under its Investment Tax Credit (ITC) and Production Tax Credit (PTC). One of the suggestions is also to coordinate trade policy across the US government to create fair conditions for the US solar industry and its workers.
“Greatly expanding U.S. PV manufacturing could mitigate global supply chain challenges and lead to tremendous benefits for the climate as well as for U.S. workers, employers, and the economy,” reads the solar energy assessment.
More about the 7 deep-dive assessments is available on DOE’s website which is part of the department’s response to the Executive Order 14017 on America’s Supply Chain.