The Solar Energy Industries Association (SEIA) has published a roadmap to achieve its domestic supply chain goal.
Following the passage of the Inflationary Reduction Act (IRA), the solar energy industry is aiming high and envisioning a future where the United States has a reliable domestic energy supply chain. The Solar Energy Industries Association (SEIA) has released a roadmap to achieve this goal with a target of 50 GW of solar generation capacity by 2030.
The United States is suffering from multiple pressures on the supply of solar modules imported from abroad. With this deficit under threat, decarbonization and climate goals, the US is now turning to increased domestic production to support the energy transition.
The Department of Energy (DOE) said, “A significant expansion of U.S. PV production could alleviate challenges in global supply chains and lead to enormous benefits for the climate, as well as for U.S. workers, employers, and the economy.” The Department of Energy concluded in a study that US production can achieve 10 GW in two years, 15 GW in three years and 25 GW in five years on the way to 50 GW annual production.
Titled Catalyzing US solar manufacturing, the report explores how the US can move from its current state of limited production to a complete, cost-effective energy supply chain.
The US currently has manufacturing capacity for materials such as metallurgical silicon, polycrylic, steel, aluminum, resins, racks and fasteners. However, there are significant gaps in the supply chain. The United States currently has no domestic capacity to produce solar ingots, wafers or cells and only modest capacity to produce solar modules, inverters and trackers, according to SEIA. As a result, these segments should be targeted on the path to 50 GW.
The SEIA report says that if the new IRA incentives are applied correctly, the US should meet or even exceed the 50 GW target across all segments of the solar energy supply chain.
The report said domestic manufacturers should focus on building initial production and backfilling components while domestic production is set up. While it will take 2-3 years to ramp up domestic module capacity, it will take 3-5 years before there is significant domestic production capacity for ingots, wafers and cells.
SEIA said investment in manufacturing should be planned wisely and in line with demand. For example, scaling up solar ingot and wafer operations before new domestic cells come online could potentially discourage investment. Also, the importance of supplying domestic raw materials and financing appropriate environmental impact assessments cannot be overlooked. For example, the construction of new domestic solar glass capacity will significantly increase the competitiveness of US module assembly.
American manufacturers must create products that are in demand by selling at a competitive price and delivering quality products. This economic competitiveness is likely to be achieved only on a large scale, requiring significant initial investment, the report said.
After the IRA,Refurbishment of large-scale production facilities is likely to begin in 2023, and the first new plants supported by this policy will start production in 2025 or as early as 2024 for investments in trackers, racks and aggressive inverters and module production.
Successful construction will require a reliable US workforce. The report says this depends on collaboration between companies, government agencies and higher education institutions; to promote solar technical training and career development programs. Diversity, equity, inclusion and justice must be central to workforce strategies during the energy transition.
SEIA suggested nine pitfalls to avoid along the way:
- The United States needs a core group of mega-factories capable of competing on a global level. Small factories should focus on niche markets.
- Economies of scale aside, utility developers need suppliers with capacities that are four times the size of the project. For someone building a 350 megawatt (MW) solar power plant, that means at least 1.4 GW of USP module capacity.
- Building the supply chain in the wrong order
- Building factories that rely on outdated production equipment, or that rely on outdated or rapidly obsolete technology (efficiency and automation are key to producing cost-effective and quality products)
- Stimulus Capital Expenditure (CapEx) only:
- CapEx is an important hurdle, but it is only a fraction of the cost of the product when viewed in the long term (polycrylic is an exception).
- Federal tax breaks that are difficult to monetize, especially for domestic manufacturers. The tax credit policy should include a way to facilitate monetization.
- Focusing only on high-tech components or end products:
- Solar cell manufacturing is not just about module manufacturing
- There are many components that are critical to a solar project and many factors that are critical to a component
- Not providing long-term investments focused on certainty of demand, capital expenditure support and ongoing production support
- Focus on technologies that are not commercially ready:
- There is a need to focus on creating advanced, commercially available technologies once the plants are operational. For crystalline silicon wafers, this means a larger wafer format. For solar cells and modules, this probably means heterojunction and TOPCon.
- Research and demonstration of more advanced technologies should continue, but companies should not focus large-scale production on unproven technologies.
- Failure to consider construction and siting issues such as permitting, road access, power access, etc. There are parallels between factory construction and the land use and environmental impact issues of large scale solar projects. For example, don’t assume that everyone wants to see a new factory in their area or that they know what’s going on in a factory
A full report is available read here.
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