The solar panel market is a mess. An ill-timed Commerce Department probe has wrought uncertainty beyond the already-fraught supply chain, but at least some U.S. developers are trying to right the ship a bit.
A group of solar development heavyweights has promised to purchase up to $6 billion worth of U.S.-built panels over the course of four years. The plan is to source up to 7 gigawatts of domestically made panels per year, an amount equivalent to more than a quarter of all the solar capacity installed nationwide in 2021. The developers — AES Corp., Clearway Energy Group, Cypress Creek Renewables and D.E. Shaw Renewable Investment — created a pact to formalize the commitment, known as the U.S. Solar Buyer Consortium, according to a scoop from The Wall Street Journal published on Tuesday.
In theory, this attempt to lure manufacturers stateside could ease some of the reliance on solar panel imports from China and Southeast Asia, which are currently the subject of tariffs and the aforementioned probe. The past several months have made it clear that relying on a few countries for the majority of imports is a precarious proposition for an industry with a Biden administration-backed mandate to grow as quickly as possible.
David Zwillinger, chief executive of D.E. Shaw Renewable Investments, told the Journal that “the last year and a half have been challenging” and that major projects have been hit by delays. Indeed, utilities have delayed plans to decarbonize because the Commerce Department probe has created an uncertain solar panel market.
Even with the new $6 billion guarantee, though, the financial calculus is tough for would-be solar developers and stateside manufacturers. Experts told the Journal that given that the building blocks of solar panels (polysilicon, ingots, wafers and cells) are mostly produced in China, U.S. manufacturers will likely have to import those raw materials. That could make the panels produced here more expensive compared with the cheaper Chinese counterparts.
Just a few weeks ago, President Joe Biden took action to reduce the effect of the solar probe on U.S. developers, giving Southeast Asian panel suppliers a two-year reprieve from any new tariffs via his emergency authority. The president said this would give the domestic solar industry time to ramp up as well, and the new pile of guaranteed cash on the table could be an added incentive.
Cypress Creek CEO Sarah Slusser said the new consortium will start taking bids from potential suppliers immediately, with an eye toward identifying partners in the coming three to four months.