To succeed, U.S. solar factories need more government support: report

U.S. solar industry needs urgent government action to compete with China, according to Guidehouse Insights report.

U.S. efforts to build a domestic supply chain for solar energy components is stalled and will require urgent government action to support the factories needed to compete with China, according to a report published on Wednesday.

The analysis by Guidehouse Insights, commissioned by the Solar Energy Manufacturers for America Coalition, said existing federal subsidies and trade policies are not enough to help U.S. producers succeed in the face of a global glut of solar equipment.

Many in the U.S. solar industry worry that the dozens of factories announced since passage of President Joe Biden’s signature climate change law in 2022 may be uneconomical as global panel prices have collapsed due to a wave of new Asian production capacity.

“The biggest thing that we’re looking for is a sense of urgency and a renewed commitment to achieving this goal,” SEMA Coalition Executive Director Mike Carr said in an interview. “There’s no fundamental reason why we can’t have this industry here, but it does take a level of commitment and a willingness to keep the pressure up and respond to changing circumstances.”

Though the Inflation Reduction Act (IRA) unleashed billions of dollars in clean energy subsidies, the report recommends more coordinated federal support for domestic solar factories.

Recommendations include tougher standards for project developers to qualify for a 10% bonus tax credit for using American-made components.

The report also calls on the Biden administration to step up enforcement of duties on panels imported from Southeast Asia.