The U.S. solar module manufacturer companies are asking President Biden for support for legislation to strengthen the domestic supply chain. They call the current moment “an inflection for the industry”.
In a letter, the Solar Energy Manufacturing for America Coalition requested that Biden put the White House’s weight behind long-term incentives for domestic manufacture included in the Solar Energy Manufacturing for America Act. The bill, which was supported by Senator Jon Ossoff (D–GA), passed the U.S. House, but has not gained traction in Senate.
The group includes North American solar module producers Heliene, First Solar Americas, Meyer Burger Americas and Silfab Solar. They claim that Biden’s goal of 30 GW annual solar deployment by 2025 would be achieved through the SEMA legislation.
The group stated that the U.S. can no longer rely on solar supply chains from overseas. They also cannot assume that prices will remain low because they are monopolized. “Moving from foreign dependency on fossil fuels into foreign dependence of clean energy is not how to truly build back better or meet our climate targets.
China is often criticized for its dependence on foreign supply chain. According to the Ultra Low Carbon Solar Alliance, 83% of polysilicon production capacity worldwide is held by Chinese producers. The report also found that 96% of wafers are made in China, 79% for cells and 70% for modules.
To avoid anti-dumping or other trade enforcement actions, U.S. solar panel manufacturers must pay a 20% premium for nonChinese polysilicon.
“SEMA will enhance competition throughout the solar supply chain, with global-scale American factories continuing to press forward cost savings in solar deployment, and bring the country’s ambitious climate goals within reach,” the coalition said.
Biden signed an executive decree shortly after assuming office, calling for a review American supply chain systems.
The Department of Energy did a thorough analysis of the U.S. supply chain for clean energy and found that incentives could offset the higher cost of domestic solar PV manufacturing. This can be between 30-40% more expensive. LG recently announced that it would exit the solar industry entirely, resulting in the closure of its Huntsville, Alabama manufacturing facility, because of “uncertainties” in the market.
DOE recommended that the U.S. grow thin-film module manufacturing, which isn’t dependent on China for input material. The agency suggested that cell manufacturing and the establishment of international standards for inverters are also opportunities to improve domestic supply chain.
According to the report, significant financial support will be required by the federal government for the U.S. solar PV supply chains. The U.S. can take strategic actions to improve workforce development, manufacturing and human rights, as well as trade, if it has the right support.