Rational Cause for Optimism

Rational Cause for Optimism: Leveling Up the Clean Tech Playing Field

From our bird's-eye view of the renewable energy industry, we often see positive developments for humanity before they become common knowledge. The purpose of this blog is to highlight the clean energy innovations and sustainability actions that are legitimate cause for optimism despite the very real threats to people and the environment posed by climate damage.

by ReVision Energy co-founder Phil Coupe

michael-wilson-jld4MmOc4Uk-unsplash.jpgIn the hyper-competitive global economy, China has surpassed the rest of the world when it comes to manufacturing the tools necessary to abandon fossil fuels. After investing tens of billions of dollars over the past thirty years in clean tech research, development, and manufacturing, China produces roughly 75% of all solar panels, 80% of polysilicon (a key ingredient for solar panels), 85% of solar cells, and nearly 100% of silicon ingots and wafers. China similarly dominates the manufacturing of lithium-ion batteries, air source heat pumps, and electric vehicles. 

Why is America so far behind on the clean tech playing field? In 1979 Ronald Reagan campaigned against President Jimmy Carter by ridiculing renewable energy and promising to re-focus on oil, gas, and coal. When President Reagan had the solar hot water system removed from the White House in 1986, he symbolically and literally conceded the multi-billion dollar clean energy manufacturing boom to the rest of the world, enabling China to pounce on one of the greatest wealth creation opportunities of the 20th century. Until now.  

With the passage of the Inflation Reduction Act (IRA) in 2022, President Biden and Congress have unleashed a generational opportunity for America to compete on a level playing field with China and to establish true long-term energy independence. The IRA’s Advanced Manufacturing Production Credit is expected to attract more than $114 billion in domestic investment by 2031 as companies rush to build American-based facilities to process silicon into polysilicon, create silicon ingots, wafers and solar cells, and ultimately manufacture solar panels.


Photo credit: National Renewable Energy Laboratory, NREL.gov 

American-Made Solar Panels 

Qcells-Bartow-County-solar-factory-artist-rendering.jpgAn artist's rendering of the new QCELLS factory in Georgia. (Credit: QCELLS)Q CELLS, one of ReVision Energy’s long-time solar panel suppliers, announced last month that it is investing $2.5 billion to expand its manufacturing capacity in Georgia. It’s noteworthy that the majority of this investment is going toward the construction of America’s first facility capable of turning polysilicon into ingots and wafers, and eventually solar cells and panels. 

Keeping the entire clean tech supply chain within U.S. borders is one of the key objectives of the Inflation Reduction Act and early signs indicate this is possible. The future Q CELLS plant in Cartersville, GA will source its polysilicon from the REC Silicon Plant in Washington state. To create polysilicon, REC Silicon plans to source the base, high-purity silicon metal from Alabama, Ohio, Mississippi, and West Virginia. When it’s operational in 2024, Q CELLS' Cartersville plant will be the only U.S. facility manufacturing silicon-based solar panels all the way from raw materials to finished product. 

Claremont Makerspace Roof LgSwiss solar panel manufacturer Meyer Burger is also re-committing to manufacturing in the U.S. as a result of the IRA. The company recently announced plans to build a solar panel manufacturing plant in Goodyear, Arizona along with plans to expand its facility in Switzerland to meet surging U.S. clean energy demand. Chinese solar panel manufacturer JA Solar has announced plans to build a plant in Phoenix, AZ and global manufacturing giant First Solar is now planning to open its fourth U.S. plant in Alabama. 

Domestic manufacturing of lithium-ion batteries and electric vehicles (including the raw material supply chains) are also getting huge boosts from the Inflation Reduction Act. As one example, Ford stands to benefit from roughly $3 billion in tax breaks on the twin factories it has under construction in Kentucky. 

4-tesla-powerwalls-installed-by-revision.jpegCritical minerals and raw materials for batteries qualify for a 10% tax credit, while American-produced battery modules qualify for a $10/kWh credit; these together eliminate about 30% of the cost to assemble an electric vehicle battery pack. The IRA’s battery storage incentives have caused Tesla to pivot on its battery manufacturing strategy with the company moving factory equipment planned for Germany to a Texas location. Similarly, Hyundai has announced plans to open an EV manufacturing plant in Georgia. 

Sourcing Domestic Raw Materials 

The IRA’s incentives for domestic raw materials throughout the supply chain have sparked intense dialogue in Maine about the potential to mine an estimated $1.5 billion lithium deposit in Newry. An early Department of Environmental Protection ruling has classified the deposit as a resource with the potential to contaminate groundwater that would fall under the state’s most restrictive mining rules, making it extremely difficult to access for the mine’s owners. An effort is underway to reclassify the Newry deposit to make it accessible to mining. This will be a highly controversial subject in Maine in the months and years ahead as America tries to wean itself off foreign rare earth metal supply chains. 

In the early 1900s, fossil fuel companies stood at the threshold of the largest wealth creation opportunity in history; today America’s clean tech industry is crossing a similar threshold. We think it’s cause for optimism that the IRA has already begun creating thousands of good domestic jobs by unleashing billions in clean energy investments. Companies like ReVision Energy have an extraordinary opportunity to change the world by capitalizing on the IRA and distributing wealth far more equitably than the oil oligarchs of the past.