Dalton, Georgia was once known as the carpet capital of the country. Economic diversification meant moving from wall-to-wall to hardwood floors. At Qcells, a manufacturer of solar modules, robots now patrol several hectares of production area, where sensitive solar cells are packaged, laminated and packaged into sophisticated modules on a highly automated production line – almost 30,000 per day at peak production.
The company built a massive factory in Georgia — one of the key states for the 2024 presidential election — and has another in the works. Both plants will employ thousands of people, secured by President Biden’s signature clean energy initiative, the Inflation Reduction Act.
“Just walking in here, you feel like this is the future,” said Wayne Lock, 32, a Qcells quality engineer, as he walked through the production line, which has been bustling since Mr. Biden took office in August 2022 signed the law. keep moving forward and keep up with the world.”
But instead of bragging, Qcells executives are sounding the alarm. The Biden clean energy initiative is bringing plants like hers online at breakneck speed. And the pace of production – at home and abroad – has created the prospect of a crowded market that threatens to depress solar panel prices as supply outstrips demand.
Mr. Biden’s political advantage in the clean energy economy could become a crippling liability bordering on a nightmare: shutdowns and canceled construction plans are spreading across the country, including in key 2024 states like Georgia, Arizona and Colorado.
“We should be very concerned,” said Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, a trade group. “We are very concerned.”
Even Biden administration officials described the circumstances when the clean energy bill was passed last year as “much rosier” than they are now.
The 2011 bankruptcy of another solar company, Solyndra, which cost federal taxpayers hundreds of millions, dogged the Obama administration, the last time a Democratic president tried to promote clean energy to combat climate change. Republicans made a scandal out of it, and even solar industry advocates said it was a black eye – politically for former President Barack Obama and economically for solar energy.
Biden administration officials are careful to point out that the tax incentives in the Inflation Reduction Act this time are intended to attract private investors and that the incentives only cost the government when solar panels are sold and installed.
Mr. Biden has a lot of capital riding on the solar boom: jobs with political appeal, clean energy development that could attract climate-conscious young voters who anger the president for other reasons, and a general feeling that the Biden White House is a is a transformative force, not a rigid transitional government.
At first glance, Qcells’ business appears to be a complete success. In the heart of the House district of Rep. Marjorie Taylor Greene, a Republican who has spent more time impeaching Mr. Biden than supporting his clean energy agenda, Qcells, a subsidiary of South Korean conglomerate Hanwha, has invested $208 million its production of solar modules more than doubled.
The 800 workers who built electrical panels in Dalton before Mr. Biden’s legislation have been joined by thousands more since the law’s passage. A $2.3 billion plant in Cartersville, three times the size of Dalton’s and built on 175 acres of red Georgia clay, will begin operations in January and produce not just the finished panels but also components of the panels – ingots , polysilicon wafers, etc. – produce solar cells – now manufactured almost exclusively in East Asia.
The Redeemer plant in Cartersville will be the largest solar manufacturing operation in the country, already spanning 2.4 million square feet, and once both plants are fully operational, Qcells will produce 45,000 solar modules per day in Georgia.
This “wouldn’t have happened without the IRA,” said Marta Stoepker, a spokeswoman for Qcells, citing the Inflation Reduction Act.
While the legislation subsidizes renewable energy such as solar and wind, it provides an additional tax credit for developers who install U.S.-made solar panels, with additional incentives for using U.S.-made components, such as the high-purity silicon that is another Qcells’ subsidiary is refining in Washington state and the wafers, cells and panel packaging the company will produce in Cartersville. Qcells receives a $41.30 tax credit for each 590-watt panel manufactured in Georgia.
But a dark cloud emanating from China hovers over the rapid expansion of the solar industry. Wood Mackenzie, an independent energy research firm, recently wrote that the $130 billion China has invested to retain control of solar panel components has created enough capacity to meet annual global demand through 2032, at production costs , which are 65 percent cheaper in the United States.
Solar energy analysts previously thought the industry could compete with natural gas if a watt of electricity could be generated for $1. The global price has fallen to 14 cents per watt, a 37 percent drop since January. US prices are at 30 cents thanks to trade barriers, but that’s still remarkably low.
Not everyone finds this problematic. Companies like Maxeon Solar Technologies in Colorado and New Mexico and Suniva in Norcross, Georgia, which focus on final assembly and deployment of solar panels, are content to buy cheaper components from Asia and don’t want to rush into protectionism. JA Solar, a Chinese company, is building a solar plant in Phoenix, creating more than 600 jobs without fear of Beijing.
Others in the solar industry want help quickly. They called for stricter enforcement of trade penalties for Southeast Asian factories that are nominally free of Chinese influence but in reality only provide the finishing touches to Chinese-made components, and tax preferences for U.S.-made components down to the very fine silicon that is used was converted into solar cells.
According to S&P Global Market Intelligence, the United States imported a record number of foreign-made solar panels in July, August and September, 55 percent more than a year earlier and 30 percent more than the previous three months, the previous record.
Calls for protection have bipartisan support in Congress. Senators Sherrod Brown, Democrat of Ohio, and Todd Young, Republican of Indiana, have introduced new legislation to combat China’s efforts to avoid trade enforcement by evading tariffs. Senator Jon Ossoff, Democrat of Georgia and author of the solar provisions in the Inflation Reduction Act, also voices his concerns.
“The United States must prevent this flood of cheap Chinese imports from once again crippling domestic manufacturing,” said Senator Ossoff. “This is a national security issue.”
Officially, the Solar Energy Industries Association is more optimistic. By 2030, the trade association says, Mr. Biden’s legislation will have expanded the solar industry’s workforce to 115,000 Americans, and to more than 507,000 if transportation, installation and other industries are included. The production and storage of solar energy is expected to account for 30 percent of total domestic electricity generation by 2030.
But Wood Mackenzie sees problems. “Oversupply and intense competition will shape the solar supply chain going forward and are already leading to the cancellation of some expansion plans,” the company wrote this month.
And while demand from residential customers has been strong, the biggest consumers – solar farm developers connected to electric utilities – have encountered shortages in transmission lines, transformers and land acquisition at a time of rising interest rates.
Regardless of whether solar panels and their components are made in the United States or China, their use in the country’s energy grid fulfills a key promise of Mr. Biden: tackling climate change. Renewable energy sources such as wind and solar now account for 80 percent of new electricity generation capacity. Greenhouse gas emissions are falling even as the American economy and population grow.
For now, the Treasury Department believes it has found the right regulatory balance between promoting American solar products and facilitating the deployment of cheap, clean solar energy.
But Mr Biden’s re-election may depend more on winning voters over economic progress than convincing them to care about his climate achievements. Administration officials said more data will be needed in the next few months to determine whether excess capacity caused by the Inflation Reduction Act requires a policy response, but they did not rule out new trade protection measures soon.
Mr. Carr of the Solar Energy Association says Republicans are seeking to repeal tax incentives in the Inflation Reduction Act, which would strangle the industry. If they can successfully argue that these incentives primarily help China, the repeal effort could be successful and hurt domestic manufacturers and efforts to combat climate change.
“It’s a real crisis point and, in my opinion, a real political problem.”