One year on, IRA kicks off US energy renaissance

From pv magazine USA

On the first anniversary of the passage of the IRA, the historic bill has already begun to stimulate the economy and move the United States toward a carbon-neutral future.

The massive energy, climate and tax bill includes $600 billion in spending, $370 billion of which is focused on supporting renewable energy buildout and climate resilience. The spending will be supported by closing tax loopholes on the wealthiest Americans and corporations. The legislation contains numerous provisions to support the US solar industry, including a long-term extension of the federal investment tax credit, significant domestic manufacturing incentives, labor standards, production tax credits and more. 

Over the past 12 months, numerous industry experts have pontificated on just what the IRA will mean for the US economy, the climate, and supply chain security. The National Renewable Energy Lab, for example, says that it expects that the IRA will increase clean energy to the range of 71% to 90% of total US generation by 2030.

According to new analysis from the Solar Energy Industries Association (SEIA), in the year since the IRA went into effect, US solar and storage companies have announced more than $100 billion in private sector investments, with as many as 51 solar manufacturing facilities announced or expanded in the last year.

The impetus behind the growth in solar manufacturing are the production tax credits (PTC) within the IRA. Previously afforded to wind farms, PTCs now include solar for the first time. That clean-energy PTC will be available until the end of 2024 when it will become technology-neutral.

Solar, wind, geothermal, biomass, hydropower, and other eligible projects will bank a tax credit of $0.003 per kilowatt-hour generated, with $0.015 paid to projects built by workers in receipt of a prevailing wage and that met apprenticeship requirements. A higher PTC, of $0.026/kWh, is available for projects built before an “act beginning construction deadline” which will occur 60 days after the Internal Revenue Service specifies its wage and apprenticeship requirements.

In recent months, pv magazine USA has reported on a range of manufacturing announcements across the PV supply chain. German manufacturer Siemens, for example, recently revealed plans to open a string inverter factory in the United States. It plans to supply 800 MW per year to the US utility-scale market.

While US-made inverters are expected to provide only 7 GW of capacity, the capacity expectations of domestically made modules, cells, ingots and wafers are impressive. SEIA projects that by 2026, the United States will have more than 17 times its current manufacturing capacity across the supply chain, or enough to supply a majority of solar projects expected to be built in the United States.

The announcements include:

• 85 GW of module capacity
• 43 GW of cells
• 20 GW of silicon ingots and wafers
• 7 GW of inverter capacity

Among these announcements is Swiss-Germany company Meyer Burger, which will construct a 2 GW per year solar cell manufacturing facility in Colorado Springs, Colorado. The facility will be used to produce solar cells for its own solar module manufacturing facility in Arizona.

Qcells has also announced plans to manufacture across the supply chain including ingots, wafers, cells, modules and encapsulants to be made a new facility in Bartow County, Georgia, complementing its existing facility in Dalton, Georgia.

“The unprecedented surge in demand for American-made clean energy is a clear sign that the clean energy incentives enacted last year by Congress are working,” said SEIA President and CEO Abigail Ross Hopper.

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