Solar manufacturing picks up in the US despite lack of policy support

Qcells, First Solar, Nextracker and GAF Energy are all expanding capacity to produce solar products in the U.S. — no thanks to Joe Manchin and the Republicans in Congress.

A smiling man on a factory assembly line
A factory worker at First Solar's Perrysburg, Ohio manufacturing facility (First Solar)
  • Link copied to clipboard

The U.S. was once the world leader in the production of solar power equipment, but today domestic manufacturers have largely lost the battle to China. Still, despite America’s rudderless industrial policy, the domestic solar industry is starting to show some encouraging signs of life. 

There has been a recent flurry of leading solar manufacturing firms breaking ground on new U.S. factories, looking to meet the growing demand for homegrown solar products. But there have been some setbacks hindering the momentum of domestic production as well. Here’s a rundown.

U.S. solar production ups and downs

GAF Energy: GAF Energy, a Standard Industries company and sister company to GAF, one of the world’s largest roofing companies, has broken ground on 450,000-square-foot manufacturing facility in Georgetown, Texas to meet demand for its recently introduced solar roof product. The new factory, the company’s second in the U.S., will produce 250 megawatts’ worth of solar shingles annually, bringing the company’s total production to 300 megawatts a year. That will make GAF Energy the world’s largest producer of solar roofing. 

Subscribe to receive Canary's latest news

GAF Energy’s residential solar roofing system is a type of building-integrated photovoltaics, also known as BIPV. When completed, the factory will provide enough solar roofing to install on about 50,000 homes per year — and employ hundreds of people in manufacturing jobs. 

Americans actually want solar on their rooftops. Even as the pandemic persisted, residential solar had a record first quarter in 2022 with 1.2 gigawatts installed, a 30 percent year-over-year increase, according to the Solar Energy Industries Association. 

GAF Energy got an incentive package of more than $2 million from the city of Georgetown — a combination of renewable energy credits and incentives for each employee that will be maintained over a 10-year period, GAF Energy President Martin DeBono told Canary. That’s in line with the standard economic packages offered by municipalities. GAF Energy expects to invest $100 million to construct and equip the new facility. Located 30 miles north of Austin, the factory can draw employees with semiconductor expertise from that city, as well as recruit military veterans from the towns around nearby Fort Hood, according to DeBono. 

There’s this feeling that you can’t compete against China,” said DeBono. Well, you can’t compete against China doing the things that China is great at — driving costs down — so the need for innovation is paramount.” 

GAF Energy's solar roof is stealthy and low-profile. (GAF Energy)

GAF Energy is not just innovative; it’s also well positioned. It has the ideal channel to reach new customers: Sister company GAF is a leading roofing company with a network of hundreds of contractors who can convert conventional roofing customers into solar roofing customers. DeBono claims that his customer-acquisition costs are a fraction of those of a standard residential solar installer.

DeBono’s goal is to complete construction of the new factory, the site for which is currently pastureland, by the end of 2023

Tesla: Tesla has been in the process of rolling out its own domestically built solar roof product since 2016, and in keeping with Tesla product-rollout tradition, it has been a calamitous mess. Electrek reports that Tesla deployed a disappointingly modest 2.5 megawatts’ worth of solar roofs in the second quarter of 2022 and has paused scheduling of solar roof installations in virtually all markets.”

Qcells: South Korea–headquartered Qcells is investing $171 million to build a new solar panel factory to be located in Dalton, Georgia. Senator Jon Ossoff of Georgia (D) attended the recent groundbreaking ceremony. 

a group of men and women stand in front of a factory construction site
Sen. Jon Ossoff speaks at the recent groundbreaking ceremony for Qcells' solar panel factory expansion in Dalton, Georgia. (Qcells)

The new facility will produce 1.4 gigawatts’ worth of solar modules per year made with Qcells’ high-efficiency photovoltaic cells. Located near the company’s existing 1.7-gigawatt-capacity factory in Dalton, the new addition will bring Qcells’ total solar module manufacturing capacity in the U.S. to 3.1 gigawatts annually, about a third of the total capacity in the U.S., according to a release.

The new Qcells factory is expected to open in June of next year. Starting pay for the almost 500 new jobs will range from $17 to $30 per hour.

First Solar: First Solar, the largest PV panel builder in the U.S., has a total domestic production capacity of 2.4 gigawatts. The Arizona-based firm intends to increase its global manufacturing capacity to 16 gigawatts a year by 2024. Its unique cadmium telluride thin-film solar technology doesn’t use polysilicon, which insulates the company from some global supply-chain challenges.

Last year First Solar said it would spend nearly $700 million to expand its solar manufacturing footprint in Ohio, adding more than 3 gigawatts of capacity to its existing plants in the state. 

But after that project is completed, the company’s next planned plant will not be built in the U.S., First Solar CEO Mark Widmar told Reuters last week. That’s because it now appears that the U.S. Senate will not pass the Democratic-backed climate bill that would provide subsidies for domestic solar panel production. 

Where we sit now, there is no policy, there’s no direction, there’s no indication for anyone to invest here in the U.S. for solar manufacturing,” Widmar said. President Biden invoked the Defense Production Act in June in an attempt to bolster domestic solar manufacturing, but in Widmar’s estimation, even that is not going to move the needle.” 

I’m a little worried that we’re missing a window of opportunity here for U.S. manufacturing that we may never get back again,” he told Reuters. 

Nextracker: Nextracker and BCI Steel, a Pittsburgh-based steel fabricator, recently announced the reopening of a historic Bethlehem Steel manufacturing factory that’s been retooled to produce solar tracker equipment for large-scale solar power plants. This is the third domestic solar tracker fabrication line Nextracker has commissioned this year, adding to the company’s two new factories announced in April and May — a green steel tracker production line in Texas with JM Steel, and another dedicated steel production line in Arizona with Atkore.

Nextracker is the U.S. market share leader in solar trackers, a steel-intensive product used in utility-scale and other ground-mounted solar projects that enable solar panels to follow the sun’s movement across the sky and optimize plant output. Nextracker has already procured over 100,000 tons of U.S.-made steel this year, which will build enough trackers to support the installation of approximately 5 gigawatts of solar. Dan Shugar, CEO and founder of Nextracker, said in a podcast from Renewable Energy World that the pandemic and logistics crises provided an opportunity to reimagine the solar supply chain with steel mined, melted and made in America. 

The steel industry accounts for 7 to 9 percent of global CO2 emissions. Shugar noted that some suppliers such as U.S. Steel are pivoting toward electric arc furnace technology, a significantly cleaner production process compared to a traditional blast furnace. An electric arc furnace can also use recycled or scrap steel as a raw material, resulting in an even lower carbon footprint. 

Shortsighted senators

The U.S. currently has approximately 11 gigawatts of PV module production capacity, according to consultancy Wood Mackenzie, out of a global capacity approaching 500 gigawatts as of 2021, according to the International Energy Agency. China is home to up to 98% of the world’s production capacity of the silicon-based materials and components in photovoltaic panels, according to S&P Global.

This global shift to Chinese manufacturing is not unique to solar equipment. China has an industrial policy that provides low-cost power and debt to strategic industries, which then scale rapidly courtesy of an enormous, subsidized and walled-off domestic market. The occasional use of forced labor is also helpful in keeping manufacturing costs down.

While China has a ruthless and effective industrial clean energy policy, the United States has…West Virginia Democratic Senator Joe Manchin and 50 cowed Republican senators focused on maintaining their funding from the oil and gas industry. 

Manchin’s recent announcement that he would not support any climate mitigation measures within the Democratic budget reconciliation bill has effectively doomed President Biden’s plan to invest billions in promoting renewables and combating climate change.

Another casualty of this Congress is the Solar Energy Manufacturing for America Act (SEMA), sponsored by Senator Ossoff, which would have created a generous tax credit for domestic solar production at all layers of the solar module supply chain. The goal was to bring some of that China-based manufacturing back onshore, an undertaking Ossoff characterized as a generational obligation.” But though the bill passed the House, it’s stalled out in the Senate, again because of Manchin and the Republicans. 

SEMA becomes far less likely [to come to pass] if it is not part of the reconciliation package,” Scott Moskowitz, Qcells’ head of market strategy and public affairs, told Canary Media. Qcells is expanding its module manufacturing operations in Georgia because we’re committed to U.S. manufacturing and we must grow to be competitive, but the scope and scale of domestic solar manufacturing would be exponentially larger were SEMA to pass. Cell and wafer manufacturing, in particular, require durable legislation, and that is where critical bottlenecks exist. Executive action alone will not rebuild the broken solar manufacturing supply chain.”

Meanwhile, China’s solar business is going to be operating at a never-before-seen scale to satisfy the needs of its domestic PV market of more than 70 gigawatts per year, as well as demand from the rest of the globe. A single Chinese manufacturer, Longi, is set to expand its wafer production capacity to 150 gigawatts a year. China has invested more than $50 billion in solar PV manufacturing capacity since 2011, according to the International Energy Agency.

The U.S. solar industry has adapted to a pandemic, collapsing supply chains, pointless tariffs and the threat of still more pointless tariffs. Now it must adapt to the failure of the Senate to incentivize domestic solar equipment production. 

Solar is the cheapest form of grid power and the largest source of new generation in the U.S., but most of the solar hardware is made in, and will continue to be made in, China.

Eric Wesoff is the editorial director at Canary Media.