Patrick Regan, President of Crossroads Solar
Recent climate legislation in the Inflation Reduction Act could do amazing things for US decarbonization efforts and for the solar industry. As an American solar panel manufacturer, we at Crossroads Solar are watching and waiting to see how various loans pay off. A large part of the IRA's climate bill goal was to create American-made solar infrastructure to compete with cheaper imports. I think we have to be careful about how profitable or cost-effective US-made panels can be. The prices will be moderate, but we are not Chinese and we don’t have to try.
I get asked all the time how my Indian panels compete (mostly) with Asian imports on price and quality. The answer is simple: our modules are of better quality, but we are also more expensive. Both points will remain, and we should not expect that the growth of domestic production will lead to lower prices and cheaper imports. Price matters and will matter, but the cost of locally produced panels should be viewed as more than a dollar per watt calculation.
When asked about the cost of cut panels compared to the import option, I usually explain some of the additional benefits associated with this additional cost. All my employees are men and women who have made their way out of prison into society. What benefits society from these local jobs is the reduction in the cost of housing for prisoners. As my employees began to gain financial stability, they began to spend locally: cars, insurance, housing, goods. They pay child support, make amends, find partners, and get married. Some go to colleges that we support financially. You don't need to have a workforce like Crossroads Solar to take advantage of local manufacturing. Even criminals don't buy cars, don't rent apartments, and don't go to the dentist. To keep people coming back to our community, we need to pay them well.
Crossroads is unique in this sense only in its mission, not in labor costs or the benefits our work brings to local communities. It's hard to ask buyers to pay more for American-made solar panels. In the early stages of Crossroads, the additional cost annoyed me. Then someone explained to me the added value of locally produced panels and I lost a lot of worries about our price. I now understand that this is what we must pay to keep jobs and opportunities on our shores.
Add Author
Just think how many of us have regretted jumping to the lowest prices for everything from screws and door locks to tools that went from the local hardware store to the major retailer. Those big box stores thrived because we kept our prices low, but that didn't help much when you broke a cheap screw in a tree that took hours to get out. It seems that quality suffers when prices fall in this situation. There are some things about "Made in America" that we appreciate and we have no complaints about the price. Sometimes we are willing to pay for quality and service.
To put price developments in the context of solar energy, if you pay $0.10 more per watt for a 400-watt American solar panel than for a similar imported solar panel, you will pay $40 more per panel. If 25 panels are used in a 10kW array, the additional cost for those panels is $1,000. If the whole system costs over $20,000, how big is the difference?
The appearance suggests a 5 percent surcharge on US-made panels for panels that last more than 25 years. This seems like a small price to pay for things like economic stability and development combined with customer service provided by domestic production. IRA incentives will drive prices down, but the box store model shouldn't be our focus.
This dynamic changes dramatically when considering large-scale installations. Tens of thousands of panels at $40 per panel can have a huge impact on returns, which are often driven by investment decisions. At this stage of our decarburization initiative, we still need large scale imported panels. There is room for open negotiations, price cuts and compromises, but not everywhere and not always. Racing to the bottom will only break you.
Add Author
I confess that I am partial to Crossroads Solar. While I argue that price should not be as important as value, I have a personal interest in convincing you of this. We will all make choices based on our finances and our commitment to climate stability. I would rather install a solar panel than buy American panels or Crossroads Solar. IRA loans make it easier to install solar energy systems, regardless of the source of the material, but make them more affordable with the purchase of American-made products. What we cannot buy back are forests burned by bad weather, homes and coastlines destroyed by violent storms, crop failures due to drought, and lives lost because we waited for a better opportunity. solar energy." We have to do it, and we have to do it now.
The incentives in the IRA will make more solar energy available at lower rates above and below the value stream. But what the IRA shouldn't do is equate U.S. solar production with imports. This loan should lead to a long-term transformation of the US solar industry towards high-quality products and high-paying manufacturing jobs. Otherwise, moving abroad after changing the incentive structure will again change the game.
