Scaling the solar supply chain to 50GW annually: challenges and opportunities for US manufacturing

However, despite the IRA’s incentives, US solar manufacturing continues to face stiff price competition from imports. Solar module shipments, particularly from Southeast Asia, hit a record 15GW in the fourth quarter of 2023. This import volume – double the number of panels installed during the same period – has led to an enormous 40GW inventory of modules in the USA, which are being sold at or below cost and driving US module prices down by 30-50%. This is a local manifestation of a global problem of module oversupply. Recognising this crisis of massive oversupply, a coalition of US manufacturers filed a complaint with the International Trade Commission in April 2024, alleging unfair trade practices by manufacturers in Southeast Asia which are derailing the start of the US industry. The US Department of Commerce launched an investigation in response, sparking debate. Critics, including some solar developers, worry that trade barriers could hinder deployment, illustrating the delicate balance between fostering domestic production and maintaining affordable solar solutions.

Building a resilient solar manufacturing ecosystem

To overcome the dependence on foreign imports and establish a robust domestic solar supply chain capable of supporting over 50GW of installations annually, the US must navigate multiple challenges. Key strategies include boosting domestic production while maintaining competitive pricing, ensuring ongoing solar deployment and fostering energy independence.

Solar manufacturing, especially for polysilicon, wafers and cells, demands substantial infrastructure, including energy and water resources, as well as a skilled workforce. There are currently no operational solar wafering facilities in the US compared to over 30GW of module capacity. These facilities require large amounts of electricity, long and complex permitting, wastewater treatment and high capital facility investment. The lead times for new electrical substations, which can take up to three years to construct, pose significant challenges to bringing plants online. Manufacturers must work closely with utilities to secure low-carbon, competitively priced power with fast interconnection times. Water treatment infrastructure is equally important to meet the high demands of cell and wafer manufacturing.

In addition to developing this essential infrastructure, solar wafer and cell facilities rely heavily on automation and specialised equipment, requiring a well-trained workforce. Partnerships with universities, technical schools and community colleges can help build a pipeline of skilled workers. Additionally, local and state development agencies often offer workforce development incentives to support this goal.

Collaboration between government agencies and private enterprises can drive innovation and development in solar technology. Regional innovation hubs, where solar manufacturers, utilities, academic institutions and government agencies can collaborate, are critical to fostering solar innovation. States like Ohio, Georgia, Arizona, Texas and South Carolina are already leading the way in establishing these hubs, which support research and development, workforce training and grid integration.

To sustain the rapid growth of demand for solar energy, improving grid integration and energy storage solutions is vital. This is the key bottleneck to the deployment of large-scale utility projects. Utilities must continue investing in modernising the grid to accommodate higher levels of solar power. This includes developing smart grids and advanced distribution management systems and pushing utilities to supply renewable energy options to meet their sustainability goals. The IRA’s incentives for energy storage allow the incorporation of batteries into PV systems, optimising their use based on site-specific energy consumption patterns. Businesses should conduct detailed energy audits to determine the best combination of solar generation and storage, ensuring the highest return on investment.

The future of US solar manufacturing

The ongoing evolution of trade policies and IRA incentives will significantly influence the development of the US solar manufacturing industry. These shifts, particularly during this election year, will be critical to scaling up to 50GW of annual installations. Yet, federal actions alone are insufficient.

To seize this economic opportunity, businesses, utilities and regional agencies must take proactive steps. Investment in infrastructure, workforce development and grid modernisation will play a pivotal role in shaping the future of the US solar industry. Both large and small companies can contribute by reducing their carbon footprints and supporting the development of a sustainable domestic solar supply chain.

Davor Sutija is chief executive of NexWafe, a manufacturer of photovoltaic wafers based in Freiburg, Germany

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