Written by Nicola Groom
(Reuters) – U.S. efforts to build a domestic supply chain for solar energy components have stalled, according to a report released on Wednesday, with emergency government measures to support factories needed to compete with China. It will be necessary.
A Guidehouse Insights analysis commissioned by the American Federation of Solar Energy Manufacturers found that existing federal subsidies and Trade policy alone is not enough.
Many in the U.S. solar industry are concerned about the dozens of factories announced since the president took office. joe bidenClimate legislation signed into law in 2022 could become uneconomic as global panel prices collapse due to a wave of new production capacity in Asia.
“The biggest thing we're looking for is a sense of urgency and renewed determination to achieve this goal,” SEMA Coalition Executive Director Mike Carr said in an interview. “There’s no fundamental reason why we can’t keep this industry here, but it does take a level of commitment and a willingness to maintain pressure and adapt to changing circumstances.”
The Inflation Control Act (IRA) pumped billions of dollars into clean energy subsidies, but the report recommends more coordinated federal support for the nation's solar factories.
The recommendations include stricter criteria for project developers to qualify for a 10% bonus tax credit when using U.S.-made components.
Currently, projects can claim credits even if the cells built into the panels are made from materials made in China. This means there is a lack of incentive for companies to build domestic sources of materials, including silicon wafers and solar-grade polysilicon, leaving the industry dependent on foreign products.
The report also calls on the Biden administration to step up enforcement of tariffs on panels imported from Southeast Asia. Biden suspended these tariffs nearly two years ago after project developers complained they would increase costs and hurt growth in key clean energy technologies.
“For a duty to work, it must be effectively enforced and actually collected,” the report states.
Finally, the report recommends increasing enforcement of U.S. laws prohibiting products made with forced labor and requiring the government to require federal solar projects to use only panels made with U.S.-made components. He said that it should be made compulsory.
(Reporting by Nicola Groom; Editing by Richard Chan)
