| Plant operators at REC Silicon's polysilicon production facility in Moses Lake, Wash., which restarted in November 2023 after a yearslong hiatus. Source: REC Silicon ASA. |
An REC Silicon ASA solar panel materials plant in Moses Lake, Wash., is preparing to ship its first new batch of polycrystalline silicon in five years, helping to reforge a fundamental missing link in the US photovoltaic supply chain.
"We were always working hard to prepare to do this at some point, some way," said Chuck Sutton, vice president of global sales and marketing at the Norway-headquartered company. "This [facility] is always evolving, and that's exciting and challenging and never boring," added the executive, who has worked at the site over three-plus decades, navigating the twists and turns of the solar and semiconductor sectors.
The plant in rural eastern Washington stopped production in 2019, a casualty of US-China solar trade disputes that accompanied the rise of photovoltaics (PV) as a leading source of new electric generating capacity globally. Now the Moses Lake polysilicon facility is reemerging as a potential cornerstone in America's hoped-for solar manufacturing renaissance, but already there are hurdles ahead.
"We wish the environment would have been better," Sutton said in an interview. "But we believe we've got a great product and a great opportunity."
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REC Silicon and other domestic PV manufacturers are entering a market facing a severe worldwide glut of PV panels, an associated steep slide in material and equipment prices, and a massive wave of imports from Southeast Asia that has sparked litigation and calls for a federal investigation. In addition, some Republican politicians, including former President Donald Trump, the party's frontrunner for the White House in the November elections, are campaigning on promises to gut President Joe Biden's landmark climate law, the Inflation Reduction Act (IRA) of 2022.
The IRA incentives are instrumental to solidifying REC Silicon's position at the upper end of the rebuilding US crystalline-silicon PV supply chain, the most common type of solar technology, alongside polysilicon producers Hemlock Semiconductor Operations LLC, a subsidiary of Corning Inc., and Wacker Chemie AG.
"It's definitely a good foundation," Sutton said of the law, which offers valuable production tax credits to PV producers, including $3 per kilogram for polysilicon. Once the factory ramps up to its annual output potential of 16,000 metric tons, REC Silicon could reap rewards of roughly $48 million per year.
South Korean industrial conglomerate Hanwha Corp. and affiliates Hanwha Group, Hanwha Solutions Corp. and Qcells are playing pivotal roles in the Moses Lake plant's comeback. Together the companies have taken a 33% stake in REC Silicon, injected over $200 million to upgrade and restart the facility, and incorporated it into a multibillion-dollar US supply chain strategy.
"They've obviously been a driving force," Sutton said. "It's great to have somebody who's committed to the supply chain and committed to the US."
'Success is not guaranteed'
After hiring about 200 new and former employees over the past year, REC Silicon plans to commence shipments of its granular solar-grade polysilicon in the first quarter to Hanwha Q Cells Georgia Inc.
The Hanwha Solutions subsidiary, part of a family of companies known as Qcells, has agreed to purchase all of the Moses Lake facility's output over the next 10 years. That output will serve as the feedstock for Qcells' integrated 3.3-GW solar ingot, wafer, cell and module manufacturing hub in Cartersville, Ga., which is under construction and scheduled to come online later in 2024.
REC Silicon estimates the deal to be worth roughly $3 billion, depending on market prices for polysilicon.
"The reopening of Moses Lake signifies real progress in standing up a domestic solar supply chain," Danny O'Brien, Qcells' president of corporate affairs, said in an emailed statement. "And for Qcells it means our solar panels — from polysilicon to finished panel — are made in America."
"It not only bodes well for the industry in the short-term, but for the long-term technology development across the country," added Mike Carr, executive director of the Solar Energy Manufacturing for America Coalition (SEMA), a trade group that includes Qcells, REC Silicon, Hemlock, Wacker, First Solar Inc. and other domestic PV producers. "Us getting back in this game is critical."
Powered primarily by Columbia River hydroelectricity, the REC Silicon plant produces an "ultra-low carbon" polysilicon that is "conflict free," said Sutton, referring to the Uyghur Forced Labor Protection Act (UFLPA). The 2021 US law prohibits imports linked to China's Xinjiang region, a major source of polysilicon, unless an importer can verify goods were made without forced labor.
China has consistently denied allegations of forced labor, but US Customs and Border Protection detentions of panel shipments under the law have created headaches for importers and added impetus for alternatives like the Moses Lake plant.
Its restart, however, "cannot be taken for granted," O'Brien said. "The Inflation Reduction Act has been critical to promoting domestic solar manufacturing but the industry's long-term success is not guaranteed given the intense market challenges we're facing."
Imports 'worthy of an investigation'
Nearly 50 GWdc of foreign-made panels arrived at US ports through November, mostly from Vietnam, Thailand, Malaysia and Cambodia, according to the S&P Global Market Intelligence Global Trade Analytics Suite.
That surge, from less than 30 GWdc of imports in 2022, landed in a market that analysts at S&P Global Commodity Insights estimate was able to absorb a record 37 GWdc.
The flood of imports is creating friction as US panel producers strive to gain a greater foothold on their home turf.
"These import levels are unprecedented [and] not in line with demand," said Carr, calling 2023 import volumes "worthy of an investigation."
Based on announcements tracked by Commodity Insights, module companies last year planned to more than double their collective domestic capacity to 22 GW and to continue a rapid build-out to 50 GW in 2024, 81 GW in 2025 and nearly 100 GW in 2026. By next year, however, that would result in capacities approaching twice the Commodity Insights US solar installation forecast, even without factoring in imports.
"That's a tough environment for these manufacturers to finalize these investments," Carr said. "It's a tough sell."
Imports have climbed steadily since Biden in June 2022 granted a two-year waiver on US tariffs applied to crystalline-silicon cells and modules from Southeast Asia, where solar manufacturers were alleged to be circumventing longtime US antidumping and countervailing duties on producers in China.
California-based solar module manufacturer Auxin Solar Inc., whose allegations prompted a US Commerce Department probe that in August 2023 concluded several Southeast Asian PV producers were circumventing the tariffs on China, cited the panel import boom in a fresh court challenge to Biden's waiver.
"The ill-begotten tariff holiday precipitated a lawless [crystalline-silicon] cell and module marketplace characterized now by massive and sustained waves of cheap below-cost [crystalline-silicon] cells and modules from Southeast Asia made primarily from components originating in [China]," attorneys for Auxin and Concept Clean Energy Inc. alleged in a lawsuit filed Dec. 29, 2023, in the US Court of International Trade.
"Importers are stockpiling these dumped imports to continue to undermine America's clean energy manufacturing base and erode the United States' national security objectives," they charged.
Seeking broader backing
Planned polysilicon, ingot, wafer and cell manufacturing capacities lag those of modules and remain below anticipated US market volumes in coming years, prompting calls for the Biden administration to offer broader backing.
REC Silicon, Qcells and other PV makers view the US Treasury Department's preliminary guidance on how clean energy projects can boost their IRA tax credit an additional 10% by using certain levels of American-made materials and components as a missed opportunity. While it does encourage US module and cell production, it fails to support domestic polysilicon, ingot or wafer production, they say.
Additional clarity on the domestic content incentive could come within weeks, according to SEMA's Carr.
"My sense is that the administration has been hearing a lot and I think recognizes there are certain limitations in what they've released so far, and I think they've expressed a willingness to do a broader revisit of the domestic content guidance," he said.
"A durable solar supply chain in the US requires additional steps by the Biden administration on future domestic content policies that incentivize the entire solar supply chain that Qcells is committed to building," added O'Brien.
Qcells has 5.1 GW of panel production potential in Dalton, Ga., (pictured) and 3.3-GW of integrated |
Qcells one year ago announced it would spend $2.5 billion to expand its PV production in Georgia, heralded at the time as the largest solar investment in US history. That includes its vertically integrated production center in Cartersville and a recently completed expansion of an existing panel assembly plant in Dalton, Ga., which raised the capacity of that site to 5.1 GW.
The Hanwha Solutions subsidiary plans to expand its Georgia workforce to 4,000 employees once the two sites ramp up to their combined 8.4 GW of annual manufacturing capacity. But the pace of Qcells' expansion will depend largely on how US market and policy conditions evolve.
Amid the challenging circumstances, the solar supplier unveiled an expanded strategic alliance with Microsoft Corp. Under the eight-year agreement, Qcells will provide 12 GW of PV panels from its Cartersville plant — made with polysilicon from the tech giant's home state of Washington — along with project engineering, procurement and construction services for projects backed by Microsoft power purchase agreements.
"This deal is one of the largest of its kind in the US solar industry and represents a major boost for the domestic solar panel supply chain in the context of the Inflation Reduction Act," a Microsoft spokesperson said in an email.