A report published on Wednesday highlights the urgent need for government action to support the development of a domestic supply chain for solar energy components in the United States. According to the analysis by Guidehouse Insights, commissioned by the Solar Energy Manufacturers for America Coalition, current federal subsidies and trade policies are insufficient to help U.S. producers compete with China, which dominates the global solar equipment market.
The report warns that despite the announcement of dozens of new factories since the passage of President Joe Biden's climate change law in 2022, many of these facilities may struggle to remain viable. This is due to a global oversupply of solar equipment, which has led to a significant drop in panel prices.
Mike Carr, Executive Director of the SEMA Coalition, emphasized the need for urgent action, stating, “There's no fundamental reason why we can't have this industry here, but it does take a level of commitment and a willingness to keep the pressure up and respond to changing circumstances.”
To support domestic solar manufacturing, the report recommends more coordinated federal support, including tougher standards for project developers to qualify for tax credits for using American-made components. Currently, projects can claim these credits even if their panels contain cells made from Chinese materials, discouraging the development of domestic sources for key materials like silicon wafers and polysilicon.
The report also calls for the Biden administration to step up enforcement of tariffs on panels imported from Southeast Asia, which were paused nearly two years ago. Additionally, it recommends stiffer enforcement of a U.S. law banning goods made with forced labor and suggests that federal solar projects should use only panels made with American-made components.
Overall, the report underscores the need for swift and decisive government action to support the growth of the domestic solar manufacturing industry and reduce dependence on overseas products.
