The Impact of the Inflation Reduction Act on the U.S. Solar Supply Chain – pv magazine USA

Tracking U.S. Solar Manufacturing Capacity

Wood Mackenzie keeps tabs on the capacity that manufacturers plan to bring online in the U.S. Despite this, three key challenges persist – material balance, pricing, and tariffs.

The Impact of the Inflation Reduction Act (IRA)

The Inflation Reduction Act (IRA) of 2022 introduces incentives for both the demand and supply sides to promote solar manufacturing in the U.S. This includes production tax credits for manufacturers and investment tax credits for developers using domestic content. These incentives have attracted significant investments from global solar component providers, leading to an increase in U.S. manufacturing capacity for solar components.

Promising Growth in Solar Manufacturing Capacity

Head of global solar at Wood Mackenzie, Michelle Davis, reports a substantial growth in announced module, cell, and wafer manufacturing capacity by 2027. However, challenges such as investment uncertainties may hinder the realization of these capacities.

Challenges in Solar Manufacturing

Davis highlights the discrepancy between module, cell, and wafer manufacturing capacities in the U.S., signaling a continued reliance on imports for upstream materials. Additionally, the complexity and cost of building cell and wafer facilities pose a significant challenge to achieving the projected capacities.

The U.S. solar industry also faces a shortage of other essential components like glass, frames, and junction boxes, which are mostly imported. The industry is urged to explore alternatives like steel frames to reduce dependency on foreign imports.

Price Competition and Tariffs

Oversupply from overseas manufacturers has led to intense price competition, with U.S. manufacturers selling modules at a loss to stay competitive. To address this, the Department of Commerce has initiated investigations into alleged antidumping and countervailing duty infractions in certain countries.

Upcoming Summit on Solar and Energy Storage

Wood Mackenzie will delve deeper into these challenges at the Solar and Energy Storage Summit in San Francisco on June 12 to 13. Stay tuned for insights and discussions on the future of solar manufacturing in the U.S.

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