IRA Growth Meets Supply Chain Limits
Elissa Pierce, the Solar Module Supply Chain Analyst at Wood Mackenzie, shed some light on the policy shifts reshaping the US solar supply chain. She emphasized that the IRA incentivized US solar module manufacturing capacity by over 6-fold since August 2022. With capacity now exceeding annual installations, she believes that it will stay at essentially the same levels between 2025 and 2026, even though the pipeline is set to grow to 88 GW by the end of 2025 from 42 GW last year, towards 122 GW by 2030.
While 2 cell makers have started production in the US since last year’s event – Suniva and ES Foundry -, Pierce showed that the upstream segment has not kept pace with module manufacturing growth, and the country remains dependent on imported components, which exposes them to trade tariffs.
The US government’s AD/CVD tariffs on CMTV (Cambodia, Malaysia, Thailand, and Vietnam) imports are blocking the supply chain, while the new investigations against Laos, Indonesia, and India have only complicated problems for US PV power plant developers.
Pierce stressed that high tariffs on Southeast Asia and India would constrain solar cell supply to the US, which doesn’t have enough of its own as yet. Currently, the global solar cell production capacity stands at 1,693 GW, of which China alone accounts for 1,493 GW, followed by CMTV with 96 GW, Indonesia and Laos with 36 GW, and India with 33 GW, among others. Even polysilicon production capacity will not be possible as its build-out will take years. Section 232 investigation on polysilicon and derivatives could cause further disruption, she warned (see Wood Mackenzie Calls Section 232 US Solar’s Biggest Challenge).
She sees the MENA region becoming the next major cell and module supplier to the US, but again, mainly backed by Chinese companies. However, most factories are not expected to come online until 2026 or later. In such a scenario, the US is likely to take years to build a self-sufficient module supply chain.
In a panel discussion that followed this session, the 3 speakers were joined by American Clean Power Association’s (ACP) VP Supply Chain and Manufacturing, MJ Shiao. Along with moderators, Michael Schemla of TaiyangNews and Senior Policy Analyst Christian Roselund from Clean Energy Associates, the panelists discussed steps to save US solar manufacturing in the current adversary policy environment.
