A South Korean producer plans to spend $2.5bn to broaden solar energy tools manufacturing within the US state of Georgia, an indication that billions of {dollars} of inexperienced subsidies handed by Democrats are sparking new clear power funding.
The transfer by Hanwha Q Cells to construct extra photo voltaic panels and parts within the southern state will mark the biggest overseas direct funding in US photo voltaic manufacturing, based on fDi Markets. It comes as lawmakers try to rebuild the American industrial base and make provide chains much less reliant on imports from China.
The local weather legislation signed by President Joe Biden final yr included $369bn in tax breaks for clear power reminiscent of photo voltaic. Senator Jon Ossoff, a Georgia Democrat, stated a aim of the incentives was to “finish America’s dependence on Chinese language merchandise” when it got here to “strategic photo voltaic expertise”.
“This geostrategic financial competitors will proceed. I’m not declaring victory on that entrance, however I’m declaring victory in bringing large funding to my state and increasing American manufacturing capability,” he stated.
The US final yr made photo voltaic modules with capability totalling 8.9 gigawatts, about half of demand from energy firms and much beneath China’s manufacturing capability of 600GW, based on Wooden Mackenzie, a consultancy.
US clampdowns on photo voltaic panel and cell imports from China have slowed connections of solar energy to the electrical grid, muting the impression of the local weather legislation formally often known as the Inflation Discount Act, stated Wooden Mackenzie and the Photo voltaic Vitality Industries Affiliation. The teams estimated the tempo of recent US photo voltaic set up slowed by 23 per cent yr on yr in 2022 on account of commerce limitations and provide constraints.
Hanwha Q Cells plans to broaden photo voltaic part manufacturing capability at its plant within the metropolis of Dalton, Georgia, and to construct a brand new plant in Cartersville, nearer to Atlanta, bringing its manufacturing capability within the US to eight.4GW by 2024.
Not like most investments in US photo voltaic which might be concentrated in modules, Hanwha Q Cells’s announcement encompasses broader segments of the availability chain, together with wafers, cells and ingots.
Georgia has been a number one US funding vacation spot for South Korean firms. The state final yr attracted $11.5bn in initiatives from South Korea, together with a $5.5bn electrical car plant from Hyundai, based on information to November from fDi Markets.
The transfer additionally follows the Biden administration’s curbs on imports of photo voltaic power parts utilizing polysilicon from China’s Xinjiang area over issues about slave labour.
Heavy US authorities assist for clear power funding has triggered alarm amongst a few of Washington’s staunchest allies in Europe and Asia, who concern it’s going to siphon initiatives and jobs from their very own economies.
However John Podesta, senior White Home adviser on clear power, dismissed these worries. “I’d say that the general web impact of US funding is nice for the world,” he stated. “It’s not simply good for the USA. It’s going to create a virtuous cycle of innovation, of reducing prices of creating these world items extra reasonably priced, as all the world strikes from an power system that’s constructed on fossil fuels to 1 constructed on clear power.”
Analysts nonetheless don’t count on an impartial US photo voltaic provide chain to develop within the close to future. “The bulletins which have been made are usually not on the similar pace proper now because the demand we predict,” stated Sylvia Leyva Martinez, a senior analyst at Wooden Mackenzie.
Biden welcomed the funding on Wednesday, saying it might “create hundreds of good-paying jobs in Georgia, a lot of which received’t require a four-year diploma”.
“It would convey again our provide chains so we aren’t reliant on different international locations, decrease the price of clear power and assist us fight the local weather disaster,” he added.
Further reporting by Christian Davies in Seoul
