Biden push to spur solar production gets $2.5 billion boost

Solar panels Source: Pixaby

Korean conglomerate Hanwha Solutions pledged to invest more than $2.5 billion in US solar manufacturing, a boost to the Biden administration’s efforts to reduce the nation’s dependence on China for its panel supply.

Unit Hanwha Qcells plans to build a new plant in Bartow County, Georgia, to make 3.3 gigawatts of solar ingots, wafers, cells and panels, the company said in a statement Wednesday. It also committed to assembling two gigawatts of modules at its factory site in the northwest part of the state, which is already the biggest panel plant in the Western Hemisphere.

The US is racing to boost domestically made cleantech supplies in its fight against climate change — while also attempting to cut its reliance on imported panels. President Joe Biden’s landmark climate law, the Inflation Reduction Act, which includes generous incentives for solar, battery and electric-vehicle manufacturing, has sparked a wave of new factory announcements.

“Today’s Hanwha Qcells announcement to make the largest solar investment in US history is a big deal for Georgia’s working families and the American economy,” Biden said in a statement. “This investment is a direct result of my economic plan and the Inflation Reduction Act.”

Nonetheless, solar equipment from overseas will be a key part of the US supply chain for years to come. While domestic panel manufacturing has slowly picked up since the Trump administration, China dominates the making of wafers, which are ultra-thin polysilicon squares that are pieced together to make modules.

US dependence on Chinese solar makers has led to occasional slowdowns in the country’s panel installations. In recent years, there have been Covid-related manufacturing delays, trade spats, allegations of forced labour in a region of China and supply snarls at US ports.

Qcells said the expansion will create more than 2,000 jobs in Georgia. Groundbreaking on the Bartow County facility is expected this quarter.

“Once the plants go into full operations, the hub will have the biggest fully integrated solar manufacturing facilities in North America,” Hanwha Qcells Chief Executive Officer Justin Lee told reporters during a briefing Wednesday.

Hanwha’s total module capacity in the US will grow to 8.4 gigawatts by 2024.

Hanwha expects to receive roughly $875 million in tax credits annually under the IRA provisions once the plants go into full operations, according to a statement. On top of that, Hanwha is eligible to receive incentives from the state, including tax cuts as well as discounts on land and construction costs, Lee said.

“We’re going to see a lot more companies like Qcells breaking ground,” John Podesta, senior adviser to the president for clean energy innovation and implementation, said in a briefing with reporters. “The Inflation Reduction Act will create more of those stories.”

© 2023 Bloomberg L.P.

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