Top US solar producers commit $6bn to boost US solar supply chain

Industry leaders have been predicting dark days ahead for US solar, between supply chain issues, rising prices and the threat from the department of commerce over tariff dodging. In response to the gloomy forecast, four of the top solar power producers in the United States have formed a consortium to tackle the problem.

Clearway Energy Group and Cypress Creek Renewables – portfolio companies of Global Infrastructure Partners and EQT, respectively – have joined forces with AES and DE Shaw Renewable Investments. Their grouping – the US Solar Buyer Consortium – aims to boost the capacity of the domestic supply chain through the investment of $6 billion in partnerships with “qualified manufacturers”, they said in a statement. Indeed, the group has already launched a RFP to seek out partners that are “aligned with the consortium’s goals”, they said.

The ultimate goal of the consortium is to be able to supply up to 7GW of solar modules per year by 2024.

A legislative helping hand

“The consortium is just one step toward bolstering America’s solar supply chain,” said Craig Cornelius, chief executive of Clearway Energy Group, in a statement. “With legislation pending before Congress, policymakers can scale our domestic manufacturing workforce and restore our country’s legacy as a manufacturing leader.”

Said legislation would raise the tax credits available to manufacturers in the solar industry, and supply a much-needed boost to the sector, Dan Sinaiko, a partner in the global projects, energy, natural resources and infrastructure practice at law firm Allen & Overy, told Infrastructure Investor. 

Also a boost to the sector is the Biden administration’s 8 June decision to waive tariffs on solar imports from southeast Asia for the next two years – a response to an ongoing probe by the department of commerce into alleged industry-wide tariff dodging by Chinese-made panel manufacturers. 

“This is all part of Biden’s vision to make the US solar supply chain more robust”, Sinaiko added. “But this [executive] order from Biden is not a panacea – no one knows if it’s enforceable or even legal.”

The split nature of public sector support

Regulatory concerns will likely be over by the end of the summer, when the department of commerce is expected to release its initial decision surrounding the petition from Auxin Solar on tariff dodging. However, the impact of the probe will be long-lasting.

“I definitely think the [creation of the US Solar Buyer] consortium is a reaction to the Auxin incident and ongoing supply chain conditions”, Sinaiko said. While the consortium did not directly mention the Auxin petition in its comment for Infrastructure Investor, it did praise the Biden administration’s executive order to pause tariffs on Southeast Asian solar imports for the next two years. 

“The White House’s recent announcement of a 24-month bridge for certain solar imports and the authorisation of the Defense Production Act are positive steps to address supply chain issues, but also highlight the urgency of finding a durable solution that supports the continued growth of American solar beyond 2024”, a spokesperson for the consortium disclosed. “Understanding that this will take time and firm support, the consortium intends to provide suppliers with the volume stability needed to expand a domestic supply chain for solar modules.”