The United States invented solar panels. Roughly 250,000 Americans make money selling and installing photovoltaic arrays. Those machines already harvest enough electricity from the sun to power nearly 11 million average households in the country today, and that number is expected to keep growing.
Yet very few solar panels are made in America. Struggling to compete with cheaper imports from East Asia, plants producing the cells and modules for panels were closing as recently as last summer.
Wednesday may mark a new dawn for the U.S. solar manufacturing sector.
South Korean photovoltaic giant Qcells announced plans to spend $2.5 billion to expand an existing factory in Georgia and build a second one-hour’s drive south. It will mark the largest investment in domestic solar manufacturing in U.S. history.
The move directly resulted from President Joe Biden’s Inflation Reduction Act, the landmark climate spending law that directed billions in subsidies and tax breaks to energy companies.
Included in the roughly $370 billion earmarked for industries that will help the U.S. slash its climate-changing emissions was the Solar Energy Manufacturing for America Act, legislation to boost tax credits for building photovoltaic panels and parts in the United States.
Qcells’ parent company, the Seoul-based industrial conglomerate Hanwha, said last March it would make a “multi-billion dollar” investment in “rebuilding the U.S. solar supply chain” if the bill passed into law.
A month later, the company became the largest shareholder in REC Silicon, a Norway-headquartered polysilicon maker, the energy-intensive material needed to make solar cells, of which China is the dominant supplier.
Since Biden signed the legislation in August, Qcells is preparing to restart production later this year at REC’s factory in Moses Lake, Washington, where the facility is entirely powered by carbon-free hydroelectricity.
The polysilicon produced there will go to Georgia, where Qcells is making the bulk of its investment. The company already operates, and now plans to expand, a factory in Dalton assembling finished solar panels near the state’s northwest border.
A second plant in Cartersville, about an hour north of Atlanta, will fabricate the individual components as well as completed panels. Construction crews are scheduled to break ground there in the next two months.
Qcells said it would hire about 2,500 full-time, permanent workers to staff the two Georgia facilities.
“My goal remains to make Georgia the world leader in advanced energy production,” Sen. Jon Ossoff (D-Ga.), the manufacturing legislation’s lead author, said in a statement. “That’s why I wrote and passed major legislation to bring more solar manufacturing jobs to our state, and today secured the largest clean energy manufacturing project in American history, with thousands of solar jobs and billions of dollars on the way to Georgia.”
Home to the only new nuclear reactors under construction in the U.S., Georgia has sought in recent years to become a manufacturing hub, luring solar, battery, and electric vehicle makers to the Peach State with generous, bipartisan packages of tax breaks and subsidies. But attempts to establish a local industry that could rival the goliath factory complexes of China and South Korea have proven difficult across North America and Europe.
The federal incentives for solar manufacturing take a different approach than past U.S. attempts at onshore technology factories.
Unlike the tax credits the Obama administration enacted more than a decade ago, which paid companies based on just building factories, the new benefits only kick in only when firms actually produce things. That means companies like Qcells must find buyers and integrate them into the supply chain, increasing the likelihood that the business will last.
But tax credits alone are unlikely to determine the fate of U.S. solar manufacturing.
The competitiveness of U.S. factories depends on continued federal tariffs on imported panels from East Asia, the energy consultancy BloombergNEF told HuffPost in November 2021, when Ossoff first introduced the legislation.
The tariffs, first put in place by former President Donald Trump, infuriated trade associations representing the solar industry, which primarily employs Americans in sales and installations, not manufacturing.
The issue came to a head last summer when the Commerce Department was set to publish the findings of a months-long investigation into whether Chinese solar manufacturers were circumventing the trade controls by redirecting products through Southeast Asia. Making the matter even uglier was the fact that many of those Chinese firms publicly admitted to employing slave labor in their factories.
Under mounting pressure from U.S. industry groups that included Chinese companies, Biden last August exempted Cambodia, Malaysia, Thailand, and Vietnam from new tariffs for the next 24 months.
The episode illustrated the tensions over making solar panels domestically, Pol Lezcano, a BloombergNEF solar analyst, told HuffPost in 2021.
“You just have very different priorities, and those priorities are not necessarily complementary to each other,” Lezcano said. “If your goal is geopolitics and domestic supply-chain security, onshoring is a solution for that. If your objective is purely economics and rapid adoption, then the right way to go is to remove all the tariffs and get the cheapest modules.”
But Marta Stoepker, a spokesperson for Qcells, said the company’s “multi-phase, multi-billion dollar plan” was “not going to slow down,” regardless of U.S. trade policy.
“Whatever happens in one-and-a-half years, we are still moving forward and thinking through how we’re investing and building clean energy in America and how we’re making it a fully integrated supply chain for our customers,” she said by phone Tuesday ahead of the announcement. “This is the beginning for us, and we’re just getting started.”