How America is Investing in Domestic Solar Manufacturing
America’s dependence on Asian manufacturing of solar cells and related products has become a liability. This was made quickly apparent by both the Trump administration’s tariffs on imports and the pandemic’s supply chain upheaval soon after. While the tariffs were intended to encourage solar contractors to source from American suppliers, a lack of investment in manufacturing left few realistic options. With almost no domestic suppliers to buy from, and tariffs driving up prices on solar imports, the move only served to increase product sourcing costs. Then, once the supply of imports was halted by COVID, the lack of American producers became disastrous.
Now, the recent controversy over an investigation into tariff evasions has caused a supply chain disruption once again. Although the Biden administration has provided relief in the form of a tariff pause, it is clear that significant efforts must be made to quickly scale domestic manufacturing.
Federal Investments Will Spur U.S. Production Fortunately, the Biden administration has made significant changes that are slated to triple domestic solar manufacturing by 2024. Although some of this legislation is still dependent on Congress for approval, there is much to be optimistic about.
Tax Incentives for Manufacturers The Senate is currently reviewing the Solar Energy Manufacturing for America Act, which would offer tax credits for manufacturers through 2028 (with a 2-year phase-down following). The credits would include: ● ● ● ●
Modules - 11¢ x capacity Cells - 4¢ x capacity Wafers - $12 per square meter Solar-grade polysilicon - $3 per kilogram
Defense Production Act Biden has invoked the DPA to expand solar manufacturing of: ● Photovoltaic modules, module components & other solar panel parts ● Building insulation ● Heat pumps ● Electric-based fuel equipment including electrolyzes, fuel cells & related platinum group metals ● Transformers & other critical power grid infrastructure Supporting the production of these materials will include offering American manufacturers loans and loan guarantees, as well as making purchases and purchase commitments for federal clean energy projects.
Federal Procurement Biden’s plan will use two procurement tools to immediately increase demand for domestic production: 1. Master Supply Agreements that will streamline product sales to the federal government. 2. Leveraging the Buy American Act to impose domestic content standards for federal procurement of solar systems and give “Super Preferences” in terms of pricing. American-Made will Soon be Prevalent in Solar These initiatives will quickly bring domestic solar production up to a level where we are no longer dependent on foreign manufacturing. This will improve competition and pass on price savings that come from a lack of import fees and overseas shipping. Contractors will likely see better sales numbers as solar panel prices drop and there are fewer disruptions to the supply chain. In the meantime, solar installers can give themselves a leg up by partnering with a solar marketing company. After establishing a new source of dependable, pre-screened leads, contractors can secure more customers without having to ramp up their marketing. Grid Freedom is a top agency for lead supply, giving contractors consistent access to the best quality leads in local markets. Ease Sales with www.GridFreedom.com
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