It’s Time to Rebuild the US Solar Supply Chain

Feb 11, 2022

Eric Hafter, Origami Solar Co-founder / Chairman

For generations, there was no debating the need to reduce our dependence on foreign oil. George W. Bush and Ronald Reagan supported it. So did Barack Obama and Bill Clinton.

As the economy transitions from fossil fuels to clean energy, it’s time for a new pledge that everyone can get behind: the need for renewable energy independence.

Manufacturers in a wide range of industries—textiles, automotive, semiconductors, and more—are taking a fresh look at US manufacturing in light of the supply chain disruptions of the past two years. The solar industry should do the same.

As it stands, rising material and shipping costs threaten to postpone or cancel 50 GW of utility solar projects in 2022.

US manufacturing will help secure our clean energy future. It will also create jobs and reduce greenhouse gas emissions.

US factories produced the world’s first commercial solar photovoltaic (PV) products and once accounted for 22 percent of the world’s solar modules. Now, output is down to 1 percent.

With the right combination of public policy support and private investment, US manufacturing can be competitive again on the global stage. We can’t wait a couple generations to complete the clean energy transition. The time for a solar manufacturing renaissance is now.

Rising material and shipping costs threaten to postpone or cancel 50 GW of utility solar projects in 2022.

Energy security

Decarbonizing the grid depends on a large, long-term increase in solar energy deployment. Global energy transition investment needs to average a little over $2 trillion per year between 2022 and 2025 to get on track for net zero carbon emissions, according to Bloomberg New Energy Finance.

The market is trending in the right direction. Investments reached a record $755 billion in 2021, up from $595 billion in 2020. The largest financing sector was renewable energy deployment.

But investment from the US, the second-biggest funder, grew at a much slower rate than China, the world leader. Trade disputes and slowdowns in manufacturing and transportation threaten to hit the brakes on US contributions at a time when the energy transition has to speed up.

Supply chain security

Energy security is about independence and self-reliance, the control of our own destiny. On a local scale, disruptions in energy supply, such as the large-scale power outages in California and Texas over the past few years, have driven households and businesses of all sizes to invest in solar and energy storage.

Delayed supply chain imageOn a global scale, the trend toward regional solar module manufacturing follows the same logic. There’s too much risk in relying on a central supplier to deliver vital energy resources, especially as supply chain disruptions are roiling trade markets and a recent wave of aluminum factory closures pose long-term questions about whether aluminum can satisfy demand for solar.

India’s finance minister recently announced a $2.62 billion commitment towards solar manufacturing to support self-reliance as the government aims to deploy 280 GW by 2030. With government support, one of India’s largest renewable energy project developers, ReNew Energy Global, is planning to open its first solar module factory next year and has set sights on wafer production as well.

The US module maker First Solar is also developing module production capacity in India.

At First Solar’s US production center in Northwest Ohio, the company has used domestic manufacturing and domestic content to protect itself against breakdowns in global shipping and trade. With two factories operating and a third factory on the way, First Solar expects to reach 6 GW of annual US production capacity in 2023.

US Energy Secretary Jennifer Granholm has called First Solar an “example of how investment and innovation can build the clean energy future right here at home—shoring up American competitiveness and bringing good-paying jobs to all pockets of the country.”

Federal incentives for solar manufacturing will significantly increase investment in US-based module manufacturing.


Rebuild the US solar supply chain imageMore than 230,000 people now work in the US solar industry. The number of solar jobs exceeds the combined job count in all the fossil fuel industries.

Origami Solar plans to support continued job growth in the US by reducing solar module costs and sourcing material for the solar module frame from domestic suppliers.

Manufacturers can and should produce module frames with steel instead of aluminum to drive down costs. The switch would mean lower material costs. And because the US has domestic steel production while aluminum frame production happens overseas, the switch would also reduce costs, risks and the environmental impacts related to shipping.

A robust regional steel ecosystem is operating in every major region of the world, including Africa, Asia, Oceania, Europe, the Middle East, North America and South America. With substantial production close to home, there’s no need for overreliance on a central supplier. Each continent can support the development of domestic solar supply chains.

Environmental impact

The need to reduce greenhouse gas emissions that’s driving the global energy transition is also giving module suppliers a good reason to use steel frames instead of aluminum.

For each kilogram of aluminum sourced from the global market, production releases 16.1 kilograms of greenhouse gas (GHG) emissions. For the same quantity of steel, GHG emissions would drop to 1.9 kg.

A shift to steel module frames would cut GHG emissions by 85-90 percent with added environmental benefits as solar deployments continue to grow in the years ahead. One forecast expects global solar module output to increase by more than 13 percent per year for the foreseeable future. To put this in perspective, worldwide output, now at about 400 million aluminum frames per year, would top 800 million frames within eight years.

It makes no sense for the increased solar project deployment our planet needs to result in dramatically increased GHG emissions when sustainable alternatives are available.

“Build Back Better” has the right approach

At the start of the Obama administration, a federal stimulus bill helped kick off a decade of growth for US solar deployments. Provisions in the Biden Administration’s Build Back Better Act supporting US solar supply chains can have an even larger impact.

The bill includes a 10-year extension of the solar investment tax credit, domestic manufacturing incentives, over half a trillion dollars to support the transition from fossil fuels to clean energy sources, and more. These policies, whether they’re included in a single bill or parceled out into separate, focused legislation, would drive a huge increase in solar capacity and solar jobs, leverage additional private investment, and speed up the reduction of GHG emissions.

Opportunities like this don’t come around very often. It’s time to rebuild the US solar supply chain now.