Many people want to see US solar and other renewable energy industries grow to their full potential, and not just built with imported products, but more clean energy manufacturing and jobs too. The Build Back Better bill, recently passed by the US House of Representative and now pending approval in the Senate, would provide the funding and support needed to quickly expand US manufacturing of solar, wind and other renewable energy equipment, creating tens of thousands of new clean energy manufacturing jobs and a thriving domestic clean energy manufacturing industry.
The US solar industry employed more than 230,000 workers in 2020, with about 14% of those jobs in manufacturing, according to the National Solar Jobs Census. Like other industries, the solar industry saw jobs decrease during the pandemic, but in 2021 we bounced back and we’re expecting to see the increase in solar jobs we’ve experienced this year reflected in the next report. The Build Back Better legislation would continue to accelerate this trend of increasing solar jobs, which provide great new opportunities for Americans to benefit from and be part of the expansion of renewable energy industries.
The Build Back Better legislation would provide $555 billion for clean energy and climate action, including $110 billion for clean renewable energy manufacturing and supply chain investments, and $320 billion for clean energy tax credits for installing solar and other clean energy generation.
America has what it takes to build a thriving solar manufacturing industry, but we need the tools and financial support to wean ourselves off solar modules imported from Asia, which accounted for nearly 90% of US solar module shipments in 2020. The US needs to build our own industry and local supply chain to fully benefit from the clean energy transition.
The Build Back Better Act includes investment tax credits for advanced energy manufacturing capacity in combination with targeted domestic supply chain production tax credits for solar, onshore wind, offshore wind, and batteries. For manufacturers, these include a 30% tax credit for advanced energy manufacturing facility investments, or a production tax credit for sales of solar cells and modules at roughly $0.07 per watt for solar modules made in America. For a solar manufacturer, that translates to a $25 tax credit for every 360-watt residential solar panel you make, or $37.80 off every 540-watt utility-scale solar panel.
The Bill would also increase the federal incentive to install solar panels to 30% of the cost of the system, plus an additional 10% if you use solar components made in America, payable via a tax credit. The current US solar investment tax credit (ITC) is equal to 26% of the cost of the system.
In addition to increasing the solar ITC to 40% for systems that use US-made equipment, the legislation includes a direct pay option for commercial and residential solar projects in lieu of having to claim the ITC in your tax return. This would make it much easier for middle and lower income Americans and for small and medium-size businesses to be able to afford their own solar systems.
The current ITC, which is only payable as a credit on the consumer’s tax return, limits the incentive to high earners with a higher tax bill, and often excludes homeowners who earn less and owe less on their taxes. Making clean energy accessible to all is critical to addressing climate change and switching to clean energy from fossil fuels.
With energy demand growing in the US and a preference for solar energy as a resource, we have big ambitions at Heliene Solar to make more solar PV modules in the US to supply American solar projects. We currently produce solar modules at our US factories in Mountain Iron, Minnesota, Riviera Beach, Florida, and in Ontario, Canada, where our corporate headquarters are located. We are currently expanding our Minnesota facility and are on track to increase our manufacturing capacity to 900 megawatts of solar panels by mid-2022.
As the US solar energy industry has grown, solar power has become one of the cheapest forms of electricity, compared to coal-fired power and other forms of conventional energy. The levelized cost of energy for new utility-scale solar energy is now $28 a megawatt-hour (MWh), on average, according to Lazard. This compares to a marginal cost of $42 per MWh for power from existing coal-fired power plants, $29 for nuclear power from existing plants (not including these plants’ intrinsic cost of utilized water and the cost of nuclear waste disposal) and $24 for electricity from existing combined cycle gas-fired power plants.
We’re very optimistic about the potential for a booming solar energy manufacturing industry and supply chain in the US and we’re a proud member of this industry, which we believe will play a critical role in enabling the US to meet its renewable energy and climate goals.
The Build Back Better bill, which President Joe Biden has promised to sign into law, will provide a solid foundation for America’s vibrant solar manufacturing industry to grow to its full potential.
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