An Italian company announced plans Monday to build a $1 billion solar power plant in Oklahoma, turning the industry on its head as its growth trajectory remains uncertain and Congress suspends some of its key stimulus plans.
Enel North America announced that its subsidiary 3Sun USA will begin producing modules and solar cells at a new plant in Inola, Oklahoma, starting in 2024. Next year the plant could produce up to 3 GW of module capacity, and the trend is increasing. Next year will be 6 gigawatts, he said.
The facility could be the first in the country to make solar cells from crystalline silicon — a key component of most modules that hasn't been produced on a commercial scale in the U.S. for years. Currently, most of the solar panel components are imported.
The $1 billion deal is one of the largest solar manufacturing deals since the passage of the inflation-adjusted law, which began to change the way American panels are made. It's also happening as the industry faces important business and financial decisions from the Biden administration that could impact its future.
According to the Solar Energy Industries Association, recently announced installations with more than 56 gigawatts of solar panel capacity have been secured by manufacturers since the law was passed. That's about 10 times the current panel production capacity in the U.S., according to estimates by the National Renewable Energy Laboratory.
The announcement represents "a major step in the development of a state-of-the-art photovoltaic system" that will put Oklahoma "at the forefront of renewable energy," said Giovanni Bertolino, director of 3Sun USA, in a press release. production".
The announcement was welcomed by President Joe Biden, who issued a statement calling Enel's plans "the latest proof of the success of my investment program in America and the resurgence of American manufacturing."
"Because of my inflation legislation, private capital is flowing into Oklahoma and across the country as communities come together to help build a clean energy economy," Biden said.
However, the solar industry faces many headwinds.
The Commerce Ministry is expected to decide in August whether tariffs on Chinese solar imports should be extended to solar imports from four Southeast Asian countries, a possibility solar developers say will slow growth.
In late April, House Republicans also voted to extend the debt ceiling, a measure that would eliminate billions in clean energy tax credits, though the Senate bill is unlikely to pass.
Abbey Ross Hopper, CEO of the Solar Energy Industries Association, cited the House bill in a webinar last week and said that maintaining the inflation reduction legislation "will require a relentless effort by the entire SEIA team."
"While the [Biden] administration has made it clear that they will not consider repealing this historic law, SEIA's top priority is to keep the IRA within the law of the land," Hooper said.
Faced with potential tariffs, the Commerce Ministry confirmed its move in a tentative decision in December 2022. It found that four major Chinese mobile and wireless carriers were evading existing tariffs by exporting from Southeast Asia. About three-quarters of US solar panel and cell phone imports come from there.
Biden has sought to shield solar developers from tariffs resulting from a two-year rollback, which trade groups such as SEIA welcomed. But the holiday is unpopular with bipartisan congressmen. A Republican-backed resolution passed this month with support from some Democrats in both houses calling for the deadline to be lifted before Biden could veto it.
Overall, the solar energy sector is still struggling to get started in the way many analysts say it needs to combat climate change. In a report released Monday, the American Clean Energy Association said clean energy installations, including solar utilities, fell for the first time in five years.
In March, SEIA and market research firm Wood Mackenzie released a report showing that the number of utility-scale solar installations is set to decline by 31% in 2022, driven by a commercial probe as well as restrictions on solar imports. By customs officials who want to check that the equipment has not been made with forced labor.
"primary factor"
The Department of Energy says solar energy must be America's main energy source to meet the Biden administration's climate goals.
By 2035, for example, the U.S. will need about 760 to 1,000 gigawatts of solar power to decarbonize the grid, according to a Department of Energy study from 2021.
That's at least five times the 142 gigawatts of solar power capacity online in the U.S. by the end of 2022, according to SEIA data.
In terms of production, Enel can only double the amount of solar modules produced in the country.
About 5 gigawatts of photovoltaic modules were built in the U.S. last year, according to an April industry update from the National Renewable Energy Laboratory.
That's less than the 6 gigawatts of annual production capacity that Enel is targeting for its planned Oklahoma facility. 3Sun USA's Bertolino says inflation laws have encouraged his company to think bigger.
In an emailed statement, he said the company had already begun planning to build a solar equipment factory in the U.S. before the anti-inflation law took effect. He added that passing the law was "a key factor in the company's decision" to target 6 GW of annual capacity instead of 3 GW.
Bertolino said Enel plans to continue a 45-fold advanced manufacturing tax credit for panels and cells made at the Oklahoma plant. This credit, created under the Inflation Control Act, is available for the manufacture of various solar devices, including precursor materials such as polysilicon and wafers.
Bertolino did not directly say whether developers who buy modules from the Oklahoma plant can claim a 10% bonus under the Inflation Reduction Act to reward projects that use government equipment.
The Treasury issued guidance earlier this month outlining a complex set of calculations to determine eligibility. Bertolino said his agency is still reviewing the guidelines.
This story also appeared on ClimateWire .
