A huge community solar order is latest in US clean manufacturing boom

A record-setting supply agreement between solar hardware builder Qcells and project developer Summit Ridge Energy was announced last week, indicating that the incentives in the Inflation Reduction Act are already driving the deployment of domestically sourced renewable energy infrastructure.

The 1.2-gigawatt panel deal is the largest equipment purchase for community solar in U.S. history, the two companies said in a release. It will spur the construction of 2.5 million solar panels that will likely be deployed in hundreds of proposed projects across Illinois, Maine and Maryland. Summit Ridge Energy expects the first 200 megawatts to be installed before the end of this year.

Most American households either can’t afford or are unable to install solar — that’s where community solar comes in. The programs enable these households to jointly own or subscribe to a solar project and realize savings on their electric bill. This can be particularly useful for lower-income households, which tend to spend a much higher portion of their paycheck on electric and gas bills than higher-income households do.

Starting from roughly zero a decade ago, a total of 22 states plus Washington, D.C. have policies to support community solar, which now encompasses a whopping 5.6 gigawatts of collective generation capacity across the country. To put that in context, the U.S. finished 2022 with 142 gigawatts of total installed solar capacity.

Last year’s Inflation Reduction Act created a buffet of federal incentives for solar, including access to investment and production tax credits, as well as a bonus tax credit for serving low- to moderate-income communities. Biden’s climate law also created a $27 billion national green bank to spur private-sector lending for distributed energy projects, including community solar.

This hefty order, which drew a visit from Vice President Kamala Harris, also comes on the heels of Qcells breaking ground on a vertically integrated factory in Bartow County, Georgia. The facility will have the capacity to manufacture 3.3 gigawatts of solar ingots, wafers, cells and finished panels annually, making Qcells the first gigawatt-scale, U.S.-based, full-stack silicon solar module manufacturer.

Hanwha Advanced Materials, a subsidiary of Qcells’ parent company Hanwha Group, has also announced a $147 million investment for a factory in Cartersville, Georgia to manufacture the encapsulant material used in sealing solar modules.

The incentive math in the IRA’s domestic manufacturing tax policy comes from Georgia Democratic Senator Jon Ossoff’s Solar Energy Manufacturing for America Act, introduced in 2021.

Under the IRA, manufacturers will be eligible for a credit of at least 7 cents per watt for a solar module manufactured in a U.S.-based vertically integrated plant, plus additional subsidies for other components. Subsidies will apply across the solar value chain of polysilicon feedstock, thin-film or crystalline PV cells, wafers and modules, and will cover about half the cost of a solar module — a meaningful subsidy that will make U.S. manufacturing more competitive with solar gear built in China.

The tens of billions of dollars devoted to long-term, sweeping industrial policy on the demand and supply side in the IRA could result in gigawatts’ worth of solar-panel production being returned to American shores and gigawatts of community solar deployed where it’s most needed.

Even with these incentives and momentum, the U.S. has a long way to go. Global solar module production capacity is more than 500 gigawatts per year, and is dominated by China. With at least 11 gigawatts of solar module production capacity, the U.S. can’t even meet its own demand right now.