U.S. Solar Manufacturing Ready To Rise

Photo credit: stephen.moore

One prominent glitch in the U.S. solar industry, and one reason why system costs remain relatively high here, is a lack of U.S. manufacturing facilities. In fact many U.S. companies have actually built manufacturing plants overseas because foreign incentives made it cheaper to build products abroad and ship them home than to simply produce them here.

That, it appears, is about to change. For one, the U.S. solar industry is expected to grow by leaps and bounds within the next decade and beyond. Secondly, the American Recovery and Reinvestment Act (ARRA, otherwise known as the stimulus package) inititiates the most aggressive federal solar manufacturing incentive to date.

That incentive delivers an investment tax credit equal to 30% of an investment that “establishes, re-equips or expands” a renewable energy manufacturing facility. Combine the federal credit with many existing–and likely soon-to-come–state manufacturing incentives, and we can expect a significant rise in U.S. solar manufacturing.

This impending rise in manufacturing cannot come quick enough for many individuals and businesses hoping to benefit from a green-collar economy, of which manufacturing in all sectors will be a vital part. Some evidence of the new incentives is already apparent in the recent inauguration of a SCHOTT Solar manufacturing plant in New Mexico. That plant has already created 350 new jobs in its first phase, with a total of 1,500 permanent jobs projected when the 800,000 square foot facility is fully finished — not to mention the many jobs added or maintained in the meantime for its construction.

This increase in renewable energy manufacturing incentives is a big step to increasing America’s role in the global solar industry. Some even argue that more is needed to incentivize the supply side of the industry at home. Regardless, it is good to see a more comprehensive approach taken at our highest levels; an approach that will likely spur competition between states wanting to house new American manufacturing plants and reel in the resulting revenue and jobs.

Increased manufacturing should also stimulate lower equipment costs, thus lowering costs at the demand side (the home or business owner) and alleviating the monetary burden on cash-strapped states trying to make solar more affordable for their citizens. Now throw in domestic jobs and services created by increased manufacturing and the benefits of supporting the renewable industry from research and development to actualization really begin to shine through.

Posted on July 9th in Solar News by Dan.