U.S. Solar Manufacturing: Onshoring Gains Momentum and Thrives

On a brisk winter morning in Greenwood, South Carolina, the bright sun managed to turn the day pleasant, despite the looming threat of rain. On the last day of January 2025, around 80 participants, including state and local officials and community leaders, gathered in this small city. Their purpose? To celebrate a significant milestone for the U.S. solar industry.

The occasion was the ribbon-cutting ceremony for ES Foundry’s solar cell production facility. Currently, it’s set to be the largest of its kind in the United States. Solar industry representatives, trade journalists, and ES Foundry clients toured the manufacturing plant. There, they witnessed crystalline silicon (c-Si) solar cells at different stages of production.

Elissa Pierce, a solar supply chain analyst at Wood Mackenzie, commented, “This couldn’t have come at a better time. Onshoring upstream component manufacturing is now more crucial than ever.” Since the Inflation Reduction Act (IRA) was enacted in 2022, over a dozen solar module factories have been established in the U.S. ES Foundry represents only the second c-Si cell fabrication plant. Wood Mackenzie projects that the annual U.S. cell manufacturing capacity will reach 11.3 GW this year.

Thin-Film Dominance

First Solar, a cadmium telluride (CdTe) thin-film manufacturer headquartered in Tempe, Arizona, dominates the U.S. solar manufacturing landscape. Its integrated production process is simple: glass enters one end of the production line, and a finished module emerges from the other.

During the third-quarter 2024 earnings call, First Solar’s CEO, Mark Widmar, confirmed the commencement of production at the company’s $ 1.1-billion, 3.5-GW factory in Alabama. Widmar stated that First Solar is on track to produce 14 GW of modules in the U.S. by 2026 and 25 GW globally.

Thin-film production takes place under one roof. In contrast, c-Si supply chains are fragmented. The c-Si supply chain involves separate production processes for polysilicon feedstock, solar ingots, wafers, cells, and modules. Currently, U.S. cell production lags far behind the 50 GW of module capacity that analyst Exawatt anticipates for 2025. Moreover, there is no domestic wafer production in the U.S. yet.

Alex Barrows, the head of solar at CRU-owned Exawatt, said, “The companies we know that have imported wafers into the U.S. include Suniva, ES Foundry, Hanwha, and Silfab, which brought in wafers in January this year.” He estimates that out of the 42 GW of announced cell manufacturing plans, 10 GW could start operations this year, increasing to 19 GW in 2026.

Cell Production

Recapitalized Suniva began bringing 1 GW of cell production capacity online in Georgia in mid-2024. Canada’s Silfab is also ramping up a 1-GW production line in South Carolina. They’ve signed offtake agreements that will take effect in the second quarter of 2025. ES Foundry revealed its 1-GW line in January and started shipping cells the following month. Suniva raised $110 million in October 2023 to restart cell production, while Silfab secured $100 million for its cell operations in November 2024.

ES Foundry’s CEO, Alex Zhu, who has overseen U.S. operations for companies like Suntech, Shunfeng International Clean Energy, and GCL System Integration, said, “By August, we’ll have a capacity of 1 GW, and our goal is to reach a nameplate capacity of 3 GW.” ES Foundry’s South Carolina cell factory is equipped to handle large-format “G12” (210 mm) wafers, but currently, it uses smaller “M10” (182 mm) materials. Zhu added, “For actual output, since we’re using M10 wafers at the moment, you should probably subtract 15% to 20% from the nameplate capacity.” ES Foundry plans to transition to G12 wafer production during its second expansion phase.

Cell Drivers

The growth of U.S. solar manufacturing capabilities has been spurred by trade barriers and domestic incentives. For developers, these policies have made domestically produced PV modules appealing, both in terms of supply security and attractive subsidies. However, the policy changes implemented by the Trump administration have created significant uncertainty. The industry is now speculating about the future direction of these measures.

Zhu said, “I think almost the entire industry is waiting to see how the Trump administration’s policies unfold. The details of any changes to the IRA are crucial.”

Currently, cell producers are incentivized by the IRA’s $0.04/W tax credit. There’s an additional domestic content bonus linked to a 30% Investment Tax Credit (ITC). An extra 10% is available if certain quotas of U.S.-made components are used in utility-scale solar projects. According to Zhu, while both measures are important, the ITC remains the most critical for the overall U.S. solar industry.

Zhu warned that if the ITC is phased out or reduced prematurely, it would have a profound impact on developers and manufacturers. “That would significantly change the entire industry’s investment landscape. There are so many possibilities, making it hard to predict. Naturally, we hope to retain the 45X credit and the domestic content requirements.”

Upstream Supply

Sourcing other upstream materials could pose challenges. Lezcano pointed out that U.S. manufacturers may face ongoing difficulties, with potential bottlenecks along the supply chain. “Everyone is vying for non-Chinese polysilicon, and companies like Wacker, Hemlock, and OCI can command a premium. If you’re aiming to produce U.S. wafers, you’re competing with a long list of other companies.”

REC Silicon’s decision to halt production at its Moses Lake facility is not only a setback for non-Chinese polysilicon supplies but may also have affected Hanwha Qcells. The company had ambitious cell production plans, but Lezcano suggested that its proposed 3.3-GW, fully integrated production facility in Georgia could be delayed as a result.

Lezcano said, “Hanwha, the parent company, made a substantial investment. The fact that the deal didn’t go through may be causing internal management delays.”

Qcells seems to be behind schedule in commissioning its U.S. cell lines. Canadian Solar, both a manufacturer and project developer, may also leave customers waiting for new cells from its $ 800-million, 5-GW facility in Indiana, which was announced in October 2023.

Despite subsidies and favorable trade measures, the path to success in crystalline silicon manufacturing in the U.S. remains challenging. Silfab aims to use the negatively-doped “n-type” cells it produces in both rooftop and utility-scale module products. Suniva is also supplying cells to third-party module manufacturers. ES Foundry is focusing on mastering cell production before considering entry into the crowded module market.

Unlike Europe, which is still heavily reliant on Chinese imports to meet the needs of its solar projects and installers, the United States is approaching an onshoring milestone. Exawatt’s Barrows said that import data for February or March is likely to show that U.S. manufacturers are supplying more than 50% of the country’s end-market demand—at least for modules at this stage.

Barrows concluded, “You’ll soon be able to see from the import data that the U.S. has shifted from a market that was almost entirely dependent on module imports about a year ago to a market that mainly imports cells—although it still imports some modules.”