{"id":136189,"date":"2024-05-14T10:29:24","date_gmt":"2024-05-14T10:29:24","guid":{"rendered":"https:\/\/www.pv-tech.org\/?p=136189"},"modified":"2024-05-14T13:57:12","modified_gmt":"2024-05-14T13:57:12","slug":"efforts-to-bring-us-polysilicon-and-wafer-supply-face-an-uphill-struggle","status":"publish","type":"post","link":"https:\/\/www.pv-tech.org\/efforts-to-bring-us-polysilicon-and-wafer-supply-face-an-uphill-struggle\/","title":{"rendered":"Efforts to bring US polysilicon and wafer supply face an uphill struggle. Here\u2019s why"},"content":{"rendered":"\n
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Amongst this uncertainty, questions are being raised over whether the Inflation Reduction Act (IRA) is up to the task of bringing upstream solar supply to North America. Image: Hemlock<\/figcaption><\/figure>\n\n\n\n

The dynamics of solar supply in the US are continuing to shift.<\/p>\n\n\n\n

The Department of Commerce (DOC) may be reopening anti-dumping tariff investigations into Southeast Asian factories \u2013 which almost exclusively supply the US \u2013 just as Joe Biden\u2019s two-year waiver on tariffs is due to expire; the Secretary of the Treasury, Janet L. Yellen, said on a visit to China that she \u201cwouldn\u2019t rule out\u201d further trade measures against Chinese manufacturers<\/a>\u2019 overcapacity; and the announcements for new module assembly plants \u2013 and some cell producers \u2013 on US soil keep coming.<\/p>\n\n\n\n

And there is another elephant in the room. Amongst this uncertainty, questions are being raised over whether the Inflation Reduction Act (IRA) is up to the task<\/a> of bringing upstream solar supply to North America.<\/p>\n\n\n\n

Its incentives have so far resulted in a plethora of module assembly plant announcements, but the number of solar cell factories \u2013 which would supply the module assemblers in a domestic ecosystem \u2013 is far lower<\/a>.<\/p>\n\n\n\n

In a forthright address to the US Senate Finance Committee in March<\/a>, CEO of US-based cadmium telluride (CdTe) thin-film manufacturer First Solar, Mark Widmar, said that \u201cnot even one of the crystalline silicon panels installed [in 2023] was assembled with American-made solar cells\u201d.<\/p>\n\n\n\n

Looking further upstream, there is one reliable wafer plant announcement in the US: Hanwha Qcells\u2019 Georgia facility. CubicPV pulled out of its plans for a 10GW wafer factory<\/a> earlier this year.<\/p>\n\n\n\n

Further upstream still, US polysilicon production is floundering; REC Silicon shut down its facility in Montana in February <\/a>and then delayed operations at its Washington state plant<\/a> until Q2 this year. A glimmer of good news came last month when relative newcomer Highland Materials secured US$255.6 million to build a new 16,000 metric ton (MT) facility.<\/a><\/p>\n\n\n\n

Nonetheless, Mike Carr, the CEO of the Solar Energy Manufacturers for America (SEMA) coalition, tells PV Tech Premium<\/em> he is \u201coptimistic\u201d about the prospects for an upstream US supply as long as certain conditions are met under the IRA.<\/p>\n\n\n\n

The IRA vs. the price collapse<\/strong><\/h2>\n\n\n\n

In a public statement last month<\/a>, SEMA recommended that the US government expand the domestic content tax adder<\/a> to account for the origin of polysilicon and wafers in its definition of domestic products. <\/p>\n\n\n\n

Carr expands on this, saying that the guidance for domestic content released by the Treasury Department \u201chad some confusing elements\u201d and introduced \u201cuncertainty\u201d for the polysilicon and wafer manufacturing plans that were in the works when the IRA first passed.<\/p>\n\n\n\n

\u201cThe critical flaw was that it didn\u2019t treat the origin of the wafer as important to the calculation. You would have a cell that was made from foreign wafer and poly next to a cell that was made from domestic wafer and poly and they would receive exactly the same treatment under the domestic content bonus,\u201d he says.<\/p>\n\n\n\n

If the domestic content is altered to \u201csee\u201d the wafer and poly in the equation, coupled with the scheduled ending of President Biden\u2019s executive waiver on the anti-dumping and countervailing duty (AD\/CVD) tariffs on certain solar imports from Southeast Asia this summer, Carr says that he thinks other IRA incentives can support an upstream revival.<\/p>\n\n\n\n

\u201cThe 45X Credits\u2026are sized to help you pay for your factory. If you can justify an investment at a multi-gigawatt scale \u2013 in wafers, for example \u2013 then the 45X credits will give you the certainty that you can pay back that investment.\u201d<\/p>\n\n\n\n

This is a big \u201cif\u201d. Earlier this week, PV Tech<\/em>\u2019s Price Watch <\/em>reported that polysilicon prices had plummeted to around RMB40,000\/tonne<\/a> (US$5,524), and wafer prices have followed suit. This is largely due to incredible overcapacity from Chinese producers \u2013 in its Q1 2024 financial results, major Chinese poly producer Daqo New Energy posted a 71% decline in income<\/a> and predicted that many of its competitors in the sector would likely go bankrupt or leave over the next year.<\/p>\n\n\n\n

CEO of Daqo, Xang Xu, also said that wafer manufacturers were facing \u201csignificant pressure from accumulated inventories and negative margins\u201d.<\/p>\n\n\n\n

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