U.S. solar capacity Expansion Fierce, But Upstream Industry Layout Slightly Inadequate
2024-05-08 16:03

The Inflation Reduction Act (IRA), signed by President Biden in 2022, has significantly boosted the rise of the domestic photovoltaic (PV) manufacturing industry in the United States. Offering up to $369 billion in subsidies, the act has attracted numerous enterprises, including leading Chinese PV industry players such as Jinko Solar, LONGi, JA Solar, and Canadian Solar, to invest and establish manufacturing facilities in the country. According to the U.S. Solar Energy Industries Association (SEIA), 2023 saw the announcement of 51 new and expanded factories, with a total capacity reaching 155 GW and investments surpassing $100 billion.

Capacity and Planning

By the first quarter of 2024, the operational capacity in the U.S. reached 21 GW, which includes Trina Solar's 5 GW factory commenced at the end of 2023 and Jinko Solar's 400 MW factory in Florida. Chinese companies account for approximately 25.7% of the U.S. capacity, with the remainder primarily composed of domestic, Canadian, and South Korean firms.

Only three foreign companies have capacities exceeding 1 GW: First Solar (6.3 GW), Qcells (5.1 GW), and Solar4America (1.3 GW). Most other companies have capacities below 800 MW, with Auxin Solar—known for its anti-circumvention investigations into Southeast Asian PV products—having only 150 MW.

In terms of regional distribution, U.S. capacities are mainly concentrated in Ohio (6.4 GW), Texas (5.55 GW), Georgia (5.1 GW), and California (2.05 GW). Other states have smaller capacities spread across Washington, Minnesota, Florida, and Indiana. Mexico also serves as a significant North American production base with a total capacity of 23.2 GW, predominantly from First Solar's 20 GW and Maxeon's 2.5 GW. Canada holds about 1 GW of capacity.

Looking ahead, U.S. domestic capacities are projected to reach approximately 85 GW by 2027, with Chinese companies representing about 24 GW or 28%.

According to SEIA, U.S. solar installations added 32.4 GW in 2023, surpassing the 30 GW mark for the first time. Installations are expected to reach 38 GW in 2024, with an annual average of 40-50 GW projected from 2025 to 2030. This growth suggests that if domestic capacities are realized as planned, they will adequately meet local demand.

Upstream Capacity and Planning

On the upstream side of the solar manufacturing chain, the U.S. still faces significant gaps.

Currently, three companies—Hemlock, REC, and Wacker (Germany)—can produce polysilicon in the U.S., supporting approximately 31 GW of silicon wafer capacity.

Silicon rod capacity stands at only 3.2 GW, produced by AMG Advanced Metallurgical Group, while wafer capacity is limited to 1.5 GW, managed by SPI Energy. However, there is no current capacity for cell manufacturing.

In response, many U.S. firms plan to expand upstream, although there remains a considerable discrepancy in scale compared to expansion. On April 19 of this year, the U.S. Department of Energy announced a list of companies receiving federal grants for clean energy manufacturing. Highland Materials was awarded $255.6 million to build a 20,000-ton polysilicon production facility.

Despite government support, skepticism about the feasibility of these projects persists within the industry. Jenny Chase, a senior solar analyst with Bloomberg New Energy Finance, expressed doubts on social media, noting her 18 years in polysilicon research and having never heard of Highland Materials before. Gordon Johnson, CEO of GLJ Research, outright criticized the decision to build polysilicon capacity in the U.S. as "extremely unwise," pointing to high costs and likely financial inefficiency, posing a substantial waste of taxpayer money.

Regarding solar cell capacity planning, 12 companies have announced plans to establish factories in the U.S., with a projected total capacity of 38.8 GW by 2027. Of these, Trina Solar is the only Chinese firm, with others hailing from the U.S., Canada, India, South Korea, and other countries. Notably, Convalt Energy acquired SunPower's Oregon facility and plans to relocate the production equipment to its New York headquarters. By the first quarter of 2025, the company expects to complete a 10 GW integrated production base for silicon, wafers, cells, and modules.

Canadian Solar has announced that its 5GW solar cell project in the U.S. is expected to be completed and operational by the end of 2025. Similarly, Indian Vikram Solar plans to establish a 4GW integrated production line for silicon , wafers, and cells in the U.S. to support its module production needs, with the project anticipated to be finalized in 2025 as well.

Additionally, Maxeon is set to launch its first U.S. cell factory utilizing TOPCon technology, aiming for a module capacity of 3GW and a cell capacity of 3.5GW.

Moreover, international PV companies such as Qcell, 3Sun, Warree, and Meyer Burger have also announced plans to construct solar cell factories in the U.S., further expanding the country's manufacturing capabilities in this sector.


Tags:cell , polysilicon