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3 min read
Nov 03, 2024
by Jim Murphy, President and Co-founder of Invenergy and Chairman of the Board of Illuminate USA
Nov 03, 2024
power lines
If we want to decarbonize the grid and reclaim American leadership, we have some choices to make
by Jim Murphy, President and Co-founder of Invenergy and Chairman of the Board of Illuminate USA
Accelerated by the Inflation Reduction Act of 2022 (IRA) and the devastating impacts of climate change, clean energy is now the dominant form of new electricity generation in the U.S. Solar power is leading the way, driven by simple market dynamics – solar is among the cheapest forms of electricity available today. For the last 12 months, solar has been the largest source of new U.S. generating capacity, and the U.S. solar industry is expected to install at least 40 gigawatts per year from 2025 onward.
But COVID-19 supply chain bottlenecks clearly demonstrated that the U.S. would need greater control of the solar supply chain. That’s still true today, where most of the solar supply chain – and the technological and manufacturing expertise that comes with it – sits outside of the U.S. The widely accepted reality is that the U.S. ceded solar leadership to China decades ago.
In this context, we have choices to make. Do we want to continue to abdicate control of the supply chain and import from dominant foreign industry players? Do we want to use inferior, existing technology that is available only in limited quantities in the U.S? We see both as poor choices.
To us, there was only one choice that made sense: if we want to reclaim domestic capabilities and demonstrate consistent solar leadership, we needed to strategically and selectively partner with global solar technology leaders to learn from their expertise and establish state-of-the-art American manufacturing.
Invenergy has been a leading clean energy developer and operator for more than two decades. In 2022, we made a strategic decision to enter solar manufacturing, driven by the above principles and several other contributing factors:
1
Surging demand for clean energy: As the appetite for clean energy grew, we – and the rest of the American solar industry – found ourselves increasingly dependent on manufacturers in Southeast Asia, bringing heretofore new challenges in managing our key project inputs.2
Global supply chain chaos: COVID-19 exposed the fragility of supply chains across all industries and impacted the delivery of solar panels, which hurt customers and delayed project timelines and the achievement of domestic clean energy goals.3
Ethical concerns: At the same time – and rightly so – potential forced labor concerns highlighted the need for a more transparent, ethically sourced supply chain. Establishing the necessary protocols for review of imports took time and further exacerbated project delays.4
Federal incentives for domestic production: Recognizing the strategic importance of clean energy, the IRA provided additional incentives in the form of tax credits for locating solar production in the U.S., and with that came unprecedented economic development and job creation opportunities. These tax credits enable manufacturers to be competitive with imports and to offer lower pricing to customers who want solar panels and components that are Made in America.
Though we were new to manufacturing, we were confident in our ability to execute large scale, complicated projects. And we knew we needed an experienced solar manufacturing partner – a company with high-efficiency panels and award-winning expertise – to help us succeed.
So, in 2022, we announced Illuminate USA, a joint venture with our long-time supplier LONGi, a Chinese company and the global leader in solar technology. Invenergy—a U.S.-based and American-led company—is the majority owner and anchor customer of Illuminate USA. As a partner in this business, LONGi brings the technological expertise and experience that was necessary for the rapid deployment of the equipment at this advanced production facility.
Together, in early 2024, we began commercial operations from our brand-new, state-of-the-art solar panel manufacturing facility in Pataskala, Ohio, just 25 miles east of Columbus. In less than one year, Illuminate has:
- Created more than 1,500 American jobs in Central Ohio;
- Produced 2.6 million Made in America solar panels, many of which have been installed at Invenergy’s own solar energy projects in Ohio;
- Generated meaningful economic impact to Pataskala and the surrounding areas;
- Almost reached full production capacity of 5 gigawatts, enough to power 2 million American homes; and
- Catalyzed a budding clean energy workforce in Ohio, now with experience in the most advanced solar manufacturing technology.
Illuminate USA isn't just a factory – it's a commitment to stimulating even more onshore components of the solar supply chain. We, along with our partners across the industry, are continuing to evaluate opportunities to bring more upstream components like solar cell production to the United States.
In a world of growing geopolitical tensions, there are some who are critical of our choice to partner with LONGi – an industry leading manufacturer based in China, with worldwide operations. Our response is simple: without a partner like this, we would not have the technology or know-how to compete. There would be no state-of-the-art facility in Ohio nor the jobs and economic impact that comes along with supplying the U.S. market with the domestic solar equipment it seeks to meet demand. And we’d be a buyer with no control.
By partnering, we are learning from the best in the industry, supporting the growth of an American clean energy workforce, and meeting customer demand for these high-tech panels.
The solar supply chain isn’t going to be onshored overnight. It starts with panels, which create demand for upstream domestic cells, then wafers, ingot, and finally polysilicon. Illuminate USA is the first step towards allowing us to onshore additional parts of the supply chain. We’re excited about the strategic progress we’re making at Illuminate USA and for what's yet to come.
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