Korean solar company plans to build $2.5 billion plant in Georgia

Korean solar company plans to build $2.5 billion plant in Georgia

Korean solar company plans to build $2.5 billion plant in Georgia

The climate and tax bill that President Biden signed in August to increase the use of green energy and electric cars while expanding domestic manufacturing appears to be working.

A Korean solar company, Hanwha Qcells, announced on Wednesday that it would spend $2.5 billion to build a large manufacturing complex in Georgia. The plant will produce critical components for solar panels and build complete panels. If they materialize, the company’s plans could bring part of the solar energy supply chain, which is largely based in China, to the United States.

Qcells, which is headquartered in Seoul, said it was making the investment to take advantage of tax credits and other benefits from the Curbing Inflation Act, the law Mr Biden signed l ‘last summer. The manufacturing plant is expected to create 2,500 jobs in Cartersville, Georgia, about 50 miles northwest of Atlanta. Production is expected to start in 2024.

The company opened its first solar panel manufacturing plant in Georgia in 2019, quickly becoming one of the largest U.S. producers – by the end of last year it was churning out 12,000 panels a day. The company said its new facility will increase its capacity to 60,000 panels per day.

“As the demand for clean energy continues to grow nationwide, we are ready to put thousands of people to work to create solar solutions that are entirely made in the USA and sustainable, from raw material to finished panels. “said Justin Lee, general manager of Qcells, in a press release. statement.

Georgia Democrat Sen. Jon Ossoff and the state’s Republican Gov. Brian Kemp have aggressively courted renewable energy, battery and auto companies from the state. Several of these investments have come from South Korea, including a planned electric vehicle factory by Hyundai.

“With a focus on innovation and technology, Georgia continues to stand out as the No. 1 state for business,” Kemp said in a statement.

In 2021, Mr. Ossoff introduced a bill, the Solar Energy Manufacturing for America Act, that would have offered tax incentives to solar panel makers. The bill was later incorporated into the Inflation Reduction Act.

Under the legislation, companies benefit from a tax credit at each stage of the supply chain. The law includes about $30 billion in production tax credits to speed up the manufacturing of solar panels, wind turbines, batteries and for the processing of critical minerals. The law also offers an investment tax credit to companies that build factories producing electric vehicles, wind turbines and solar panels.

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These and other provisions aim to reduce dependence on China, which dominates the supply chain for raw materials and crucial components for batteries and solar panels. Along with fears that the United States is losing ground in important technologies, lawmakers are also worried that some Chinese producers may be using forced labor.

“I drafted and enacted legislation specifically intended to attract this type of manufacturing,” Mr. Ossoff said in an interview. “The largest solar manufacturing in US history is coming to Georgia. This economic and geostrategic competition will continue, but my law has brought the United States back into the fight to ensure our energy independence.

Lawmakers and administrations on both sides have long sought to stimulate a domestic solar manufacturing industry, including imposing tariffs and other restrictions on imported solar panels. But these efforts have so far yielded only modest results. Most solar panels installed in the United States are imported.

The Qcells project and others could reduce US import dependence, but not quickly. China and other Asian countries have a considerable head start in assembling the panels and producing the parts that make them up. Governments there have also used subsidies, energy policy, trade agreements and other tactics to help domestic producers.

While the Cut Inflation Act has spurred new investment, it has also heightened tensions between the Biden administration and allies like France and South Korea.

For example, the law offers tax credits of up to $7,500 for the purchase of electric cars, but this is only available on vehicles manufactured in the United States, Canada and Mexico. Consumers looking to buy models made by Hyundai and its subsidiary Kia would not be eligible for at least two years until the company’s new Georgia plant goes into production in 2025.

Still, energy and auto executives said overall the legislation should benefit their companies, which struggled to secure major shares when the pandemic and Russia’s war in Ukraine destroyed global supply chains.

Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, said he expects more companies to announce plans for new solar equipment factories in the United States in the first six months. of the year. His group estimates that between 2030 and 2040, American factories will be able to meet all of the country’s demand for solar panels.

“We see this over the medium to long term as a very, very big contributor to lower prices in the United States,” Carr said, referring to the cost of the panels.

Several other solar companies have announced new manufacturing plants in the United States in recent months, including CubicPV, a Bill Gates-backed startup that plans to begin production of solar panel components in 2025.

Another company, First Solar, said in August it would build its fourth panel manufacturing plant in the United States. First Solar plans to invest $1.2 billion to expand operations and create 1,000 jobs.


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