February 21, 2024

The climate and tax bill that President Biden signed into law in August to increase the use of green energy and electric vehicles while expanding domestic manufacturing appears to be yielding some results.

Hanwha Qcells, a Korean solar company, Announce On Wednesday, it will spend $2.5 billion building a massive manufacturing facility in Georgia. The factory will produce key components of solar panels and build complete panels. If realized, the company’s plan could bring parts of the solar supply chain, primarily in China, to the United States.

Seoul-based Qcells said it was investing to take advantage of tax credits and other benefits from the Lower Inflation Act signed by Biden last summer. The manufacturing facility is expected to create 2,500 jobs in Cartersville, Georgia, about 50 miles northwest of Atlanta. Production is expected to begin in 2024.

The company opened its first solar-panel manufacturing plant in Georgia in 2019 and quickly became one of the largest producers in the U.S. — by the end of last year, it was churning out 12,000 solar panels a day. Its new facility will increase production capacity to 60,000 panels per day, the company said.

“As the nation’s need for clean energy continues to grow, we are ready to engage thousands of people to create fully American-made and sustainable solar solutions, from raw materials to finished panels,” said Qcells CEO Justin Lee in a statement. said in a statement. statement.

Georgia Democratic Senator Jon Ossoff and the state’s Republican Gov. Brian Kemp have aggressively courted renewable energy, battery and auto companies in the state. Several of those investments came from South Korea, including Hyundai’s planned electric car factory.

“Georgia’s focus on innovation and technology continues to stand out as the number one state for business,” Mr. Kemp said in a statement.

In 2021, Mr. Ossoff introduced a bill to American Solar Manufacturing Act, which will provide tax incentives for solar manufacturers. The bill was later incorporated into the Inflation Reduction Act.

Under the legislation, businesses are entitled to tax credits at every stage of the supply chain. The bill includes an estimated $30 billion in production tax credits to speed up the manufacture of solar panels, wind turbines, batteries and the processing of critical minerals. The law also provides investment tax credits to companies that build factories that produce electric cars, wind turbines and solar panels.

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Those and other provisions are aimed at reducing reliance on China, which dominates the supply chain for key raw materials and components for batteries and solar panels. In addition to worrying about the U.S. losing its edge in important technologies, lawmakers worry that some Chinese producers are using forced labor.

“I drafted and passed legislation designed to attract this type of manufacturing,” Mr. Ossoff said in an interview. “This is the largest solar manufacturing plant in American history coming to Georgia. This economic and geostrategic competition will continue, but my law puts America back in the fight to ensure our energy independence.”

Lawmakers and governments in both parties have long sought to boost domestic solar manufacturing, including by imposing tariffs and other restrictions on imported solar panels. But so far, these efforts have had limited success. Most of the solar panels installed in the United States are imported.

The Qcells project and others could reduce America’s reliance on imports, but not anytime soon. China and other Asian countries have a huge lead in assembling the panels and producing the parts in them. Governments there also use subsidies, energy policies, trade agreements and other tactics to help domestic producers.

While the Lower Inflation Act has spurred new investment, it has also heightened tensions between the Biden administration and allies such as France and South Korea.

For example, the law provides a tax credit of up to $7,500 for the purchase of an electric car, but only for vehicles made in the U.S., Canada and Mexico. Consumers who want to buy models made by Hyundai and its subsidiary Kia Motors won’t be eligible for at least two years until the company’s new Georgia plant opens in 2025.

Still, executives in the energy and auto industries say the legislation should generally benefit their companies, which have struggled to secure vital parts at a time when the pandemic and Russia’s war in Ukraine have disrupted global supply chains .

Mike Carr, executive director of the Alliance of Solar Manufacturers of America, said he expects more companies to announce plans to build new solar equipment factories in the United States in the first six months of this year. His team estimates that between 2030 and 2040, U.S. factories will be able to meet all of the country’s demand for solar panels.

“In the medium to long term, we think that’s a very, very big factor driving down prices in the U.S.,” Mr. Carr said of panel costs.

Several other solar companies have announced new U.S. manufacturing plants in recent months, including CubicPV, a Bill Gates-backed startup that plans to start producing solar panel components by 2025.

Another company, First Solar, said in August it would build its fourth panel manufacturing plant in the United States. First Solar plans to invest $1.2 billion to expand operations and add 1,000 jobs.

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