By Christian Roselund

In January 2023 both Hanwha Q Cells and JA Solar announced plans for new solar factories in the United States, part of the latest wave of public plans following the passage of the Inflation Reduction Act (IRA). Hanwha plans to both expand its module capacity and build a 3.3-gigawatt integrated ingot, wafer, cell, and module factory as its second facility in the state of Georgia. JA Solar intends to build a 2-gigawatt module factory in Arizona.

Together, these plans bring the combination of announcements for U.S. crystalline silicon (c-Si) module production and existing factories to 39.9 gigawatts by 2027 (First Solar’s existing thin film module capacity and announcements for new factories represent another 10.6 gigawatts). The aggregate capacity of cell production announcements is much lower at 13.3 gigawatts, and the aggregate of ingot and wafer is 20.6 gigawatts. These figures for ingot, wafer, and c-Si cell capacity are announcements, as the United States currently has no cell, ingot, or wafer facilities. Given how uneven development is along the value chain, we anticipate that the United States will remain highly dependent on imported PV cells to feed its module factories, as well as production further upstream including polysilicon, ingots, and wafers.

There are many factors that can lead to factories being delayed or cancelled altogether. Additionally, CEA expects future manufacturing plans in addition to what has been announced to date. Therefore, the actual production capacity of solar factories in 2027 is a moving target.

Hanwha: Integrated U.S. Ingot to Module Production

On 11 January 2023 Hanwha Solutions released an investor presentation that laid out its plans for integrated manufacturing in the United States. The company plans to invest $2.49 billion in its new 3.3-gigawatt integrated ingot, wafer, cell, and module facility.

This ingot, wafer, cell and module capacity is much less than the 9 gigawatts of integrated production spelled out in filings to local tax authorities in Texas in August 2022. Regardless, if completed it would become the first operational ingot and wafer facility in the United States since SolarWorld shut its ingot and wafer production in Oregon.

In addition to the integrated production facility, Hanwha also plans to invest $181 million in another 2 gigawatts of module manufacturing on its current factory site in Dalton. When added to the 1.7 gigawatts that the company has online, the 1.4-gigawatt expansion that is currently underway, and the 3.3 gigawatts of module production as part of its integrated facility, Hanwha aims to have 8.4 gigawatts of U.S. module production online by the end of 2024.

The company did not provide a timeline for its integrated ingot, wafer, cell and module production facility. CEA research indicates that it typically takes 2 years to build and fully ramp a cell facility, and 3 ½ years to build an ingot and wafer facility.

Despite the investment in cell capacity in the United States, most of Hanwha’s cells will still come from overseas. The company currently has 10 gigawatts of cell production in China, Malaysia, and South Korea. The additional 3.3 gigawatts of cell production capacity would bring Hanwha’s global capacity to 13.3 gigawatts by the end of 2024. By 2024 the company expects to have 19.1 gigawatts of module capacity. This means that Hanwha will still need to source cells externally to run its module production at full capacity.

Hanwha’s plans to build-out its U.S. PV manufacturing are presented within the context of a strategic move downstream. The company plans to provide installation and financing services for residential rooftop solar, approach commercial & industrial solar using an energy services company (ESCO) business model and move into project development and construction. This leaves questions about how much of Hanwha’s final output will be available for developers not associated with the company.

JA Solar’s First U.S. Factory

On 10 January 2023 Chinese PV maker JA Solar announced that it will invest $60 million to build a module factory in Phoenix, Arizona. The company expects the factory to be operational by the fourth quarter of 2023, and to reach a capacity of 2 gigawatts when fully functional.

JA Solar is one of the largest cell and module makers in the world, and this will be its first U.S. factory. The company currently makes cells and modules in China, Malaysia, and Vietnam, and is building out ingot and wafer capacity as well.

Arizona currently has no manufacturing in the PV value chain. However, the state is seeing investment from battery makers, and PV cell and module maker Meyer Burger has also announced plans to build a 1.5-gigawatt module factory in Goodyear, Arizona.

Source: U.S. Solar Manufacturing Expansion Plan (Hanwha Solutions)

Source: JA Solar Announces First U.S. Solar Module Manufacturing Facility in Phoenix (Arizona Commerce Authority)

By Christian Roselund

The U.S. Bureau of Ocean Energy Management (BOEM) has issued draft environmental impact statements (EIS) for Dominion’s Coastal Virginia Offshore Wind (CVOW) project and Orsted and Eversource’s Sunrise Wind project, both on the U.S. East Coast. These are the fourth and fifth U.S. offshore wind projects to reach this stage of review that have not yet begun construction, and at 2,464 – 3,280 megawatts CVOW is multiple times larger than any project approved to date.

The two draft EIS were published in the Federal Register on 16 December 2022, which opened a 60-day public comment period. This includes three public meetings for each project during January and early February 2023. The input received will inform a final EIS.

Sunrise Wind is planned for Long Island Sound, with 94-102 wind turbines to be located 16.4 nautical miles south of the island of Martha’s Vineyard, Massachusetts. These turbines will each have a capacity of 11 megawatts, giving the project a total capacity of up to 1,122 megawatts. The project’s interconnection cables will reach land near Holbrook in Long Island, New York and deliver power to New York State’s market. The developers assume that all permits can be obtained by the end of 2023, to begin construction in Q4 2023.

CVOW is planned for a site 23.75 nautical miles off the coast of Virginia and features 176 – 205 Siemens Gamesa wind turbines. Each of these will have a capacity of 14-16 megawatts, for a combined capacity of 2,464-3,280 megawatts. The power from this project will serve Dominion’s customers in Virginia. Pending permitting approval, Dominion expects to begin construction in 2024 on foundations and install the turbines starting in 2025.

The Biden Administration has a goal to deploy 30,000 megawatts of offshore wind by 2030. To date only 42 megawatts of offshore wind turbines are operational in the United States. Two more projects, the 800-megawatt Vineyard Wind and the 132-megawatt South Fork Wind, have officially
begun construction.

Major U.S. Offshore Wind Projects to Reach Draft EIS Stage

Project	Status	State*	Developer	Capacity**	Year online
Block Island Wind Farm	Online	Rhode Island	Orsted	30 MW	2016
CVOW	Online	Virginia	Dominion	12 MW	2020
Vineyard Wind	Under construction	Massachusetts	Avangrid, CIP	800 MW	2023***
South Fork Wind	Under construction	New York	Orsted, Eversource	132 MW	2023***
Ocean Wind 1	Draft EIS	New Jersey	Orsted, PSEG	1,100 MW	2024***
Revolution Wind	Draft EIS	Rhode Island	Orsted, Eversource	704-880 MW	2025***
Empire Wind 1****	Draft EIS	New York	Equinor, BP	816 MW	2026***
Sunrise Wind	Draft EIS	New York	Orsted, Eversource	924-1,122 MW	2025***
Empire Wind 2****	Draft EIS	New York	Equinor, BP	1,260 MW	2027***
CVOW	Draft EIS	Virginia	Dominion	2,464-3,280 MW	2028***
Total Capacity				8,242-9,432 MW

* State means the state where the electricity will be delivered; some projects will be located closer to land in a different state
**Capacity is the nameplate capacity in megawatts-DC (MW); ranges reflect the options in the Draft EIS
***For projects not yet online, years shown arethe latest estimates provided by developers; multi-year delays are common
****Empire Wind 1 and 2 are considered one project for planning purposes

Three additional projects, the Ocean Winds 1 (New Jersey), Empire Wind 1 and 2 (New York Bight), and Revolution Wind (Long Island Sound), representing 3,880 – 4,056 of aggregate capacity, have received draft but not a final EIS. The addition of CVOW and Sunrise Wind brings the potential capacity of projects with a draft EIS up to 9,432 megawatts. However, only one of the projects that are still in this stage is expected to reach completion before 2025, meaning that nearly all of President Biden’s planned offshore wind goal will have to be met in the second half of the decade.

Press release: BOEM Advances Review for Two Proposed Wind Projects Off Atlantic Coast (BOEM)

By Christian Roselund

On 15 December 2022 the California Air Resources Board (CARB) approved a new plan to reduce state greenhouse gas emissions 85% by 2045 and achieve carbon neutrality through natural carbon sinks. The 2022 Scoping Plan (the Plan) for Achieving Carbon Neutrality also sets a target to reduce emissions 48% by 2030, and includes actions in the transportation, electricity, buildings, industry, and agriculture sectors.

For the electricity sector, the Plan quantifies the build-out of renewable energy generation to accommodate the electrification of heating and transportation while reducing emissions. California already has a mandate for the state’s electric utilities to source 60% of their generation from renewable sources by 2030, 90% from zero-carbon sources by 2035, and 100% by 2045. However, CARB calculates that even with efficiency measures, electricity demand will grow 26% by 2030 and 76% by 2045 versus 2022 figures.

To meet this demand, the agency estimates a need for 76 gigawatts of utility-scale solar, 29 gigawatts of customer-sited solar and 37 gigawatts of battery storage. This will require an average of 60% more solar to be installed every year than has ever been installed in any given year to date, and 700% more battery storage. This does not include capacity associated with hydrogen production or mechanical carbon dioxide removal. The agency does include the twenty gigawatts of offshore wind that California has set as a target for deployment.

CARB stresses that ongoing appliance and building energy standards are also part of the state’s plan for the electricity sector, as is work at state regulatory agencies to better integrate distributed energy resources. The Plan also notes that the transformation it envisions will require “significant transmission” to not only accommodate new resources but to access out-of-state resources and serve load pockets in California. Among the plan’s strategies for success is to continue to explore the benefits of regional markets, which California’s grid operator is doing with both intra-day and day-ahead regional market mechanisms.

The Plan also emphasizes the need to maintain system reliability during this transition. CARB notes that the state narrowly avoided blackouts in September 2022 despite additional battery storage capacity, load reductions, and increased coordination both in-state and with utilities in neighboring states. In its strategies section, CARB states that complete systemwide and local reliability assessments should be completed before state agencies update electricity sector emissions targets.

The transportation sector, which represents 40% of California’s emissions, likewise features aggressive targets. California has already mandated that new automobiles sold in the state shift entirely to electric vehicles by 2035. However, this alone will only transition a small portion of the state’s existing fleet off gasoline and diesel by 2030. Therefore, the state is aiming to reduce vehicle miles traveled 25% below 2019 levels by 2030 and 30% by 2035 through a combination of promoting mass transit and active mobility along with complementary land use changes.

Source: 2022 Scoping Plan for Achieving Carbon Neutrality (CARB)

By Christian Roselund

On 29 December 2022 the U.S. Treasury Department issued guidance which clarifies that vehicles made outside of North America can qualify for the new tax credits for commercial EVs in the U.S. Inflation Reduction Act (IRA). This section applies to leased vehicles as well, giving consumers a way to access the benefits of the tax credit for vehicles made outside North America. Treasury’s guidance was welcomed in a statement by the European Union, which is pushing for similar changes to be made to the tax credit for consumer EVs.

The IRA both modified the existing $7,500 Section 30D tax credit for consumers to buy EVs and introduced a new Section 45W tax credit for commercial EVs. The changes to the Section 30D credit included a requirement that the vehicle be manufactured in North America, as well as introducing new requirements around sourcing of materials. Both EU and German officials have protested the North American assembly requirement, and European Commissioner for Trade Valdis Dombrovskis has filed a complaint to the World Trade Organization.

However, the Section 45W tax credit includes no such language. This is noted in a newly released frequently asked questions document presented by the U.S. Treasury’s Internal Revenue Service, which also clarifies how the tax credit is claimed in a leasing situation. In its coverage, Electrek concluded that this means that dealerships can access the tax credits for EVs, and then pass these savings on to consumers in the form of reduced lease payments.

The European Union welcomed the clarification in a statement on the same day that Treasury’s guidance was released, stating that this “reflects the constructive engagement as part of the EU-US Inflation Reduction Act Task Force at senior official level.” It notes that the clarification means that the credits will be available to EU manufacturers “without requiring changes to established or foreseen business models of EU producers,” a situation that it calls a “win-win” that strengthens EU-US cooperation.

U.S. Senate Energy and Natural Resources Chair Joe Manchin had insisted on made-in-America language before he would allow the bill to pass. Manchin responded to the guidance by calling on Treasury to pause implementation of the Section 45W and 30D tax credits and ensure only EVs made in North America can qualify. “The information released today from the Treasury Department outlining how they will be implementing the commercial and consumer EV tax credits bends to the desires of the companies looking for loopholes and is clearly inconsistent with the intent of the law,” reads a statement on the Energy and Natural Resources Committee’s site.

Manchin also stated that he plans to introduce legislation to clarify the intent of the law and prevent Treasury’s implementation from moving forward. However, other Congressional Democrats want the made-in-America requirement delayed, not strengthened. In September Senator Raphael Warnock (D-GA) introduced a bill to delay the made in America requirement until after 2025. A similar bill was introduced in the House in November and attracted five total co-sponsors.

Source: Frequently asked questions related to new, previously-owned and qualified commercial clean vehicle credits (Internal Revenue Service)

News analysis: Cars assembled outside NA may qualify for EV tax credit, per new IRS note (Electrek)

By Christian Roselund

On 13 December 2022 Solar Energy Industries Association (SEIA) predicted that final 2022 U.S. solar installation figures would fall 23% year-over-year to only 18.6 gigawatts-DC, the lowest annual volume since 2019. This estimate accompanied the release of Q3 2022 installation figures, which show only 4.6 gigawatt-DC installed nationwide. SEIA describes the U.S.-market as “supply-constrained” and blames trade actions including the Uyghur Forced Labor Prevention Act (UFLPA).

Under UFLPA U.S. Customs officials have detained more than 1,000 shipments of PV cells and modules. The first shipment releases occurred in November and have been described as small. UFLPA implementation in June compounded U.S. solar market supply constraints from the solar anti-circumvention decision and the Hoshine Withhold Release Order.

Together, these three policies had a profoundly negative impact on supply for the import-dependent U.S. utility-scale market, which is reflected in SEIA’s figures. The organization expects only 10.3 gigawatts-DC of utility-scale solar to be installed in 2022, a 40% decline from 2021 levels.

By contrast, residential solar set another record during Q3 2022 with 1.585 gigawatts installed, which SEIA notes is driven by the compelling economics of rooftop solar.

SEIA expects relief to import challenges in the second half of 2023. The organization forecasts that solar market growth will resume in 2023 and thereafter, driven by the incentives in the Inflation Reduction Act.

Source: Solar Market Insight Report Q4 2022 (SEIA)