Betting big on ‘Made in America’ solar

A global energy crisis, trade disputes, and shipping constraints have magnified the importance of secure supply chains. Maybe no industry has been more exposed to those headwinds over the past two years than solar. 

Even before the Auxin Solar tariff petition threatened the U.S. market’s survival, Nextracker founder and CEO Dan Shugar made a bet: ‘Made in America’ would soon matter more than ever. 

Over the past four months, Nextracker, a leading manufacturer of trackers for utility-scale solar projects, has opened three steel production facilities in the U.S. — Corpus Christi, Phoenix, and Pittsburgh — to scale 10 GW of domestic capacity. 

A fourth facility, to be located near Chicago, is expected to be announced this fall.

The decision to ramp up domestic manufacturing was an easy one, Shugar said, and was made quickly, a little over a year ago.

"We decided right then that we were going to order a massive amount of manufacturing equipment to be able to support a significant expansion in key markets, including the United States," Shugar said on an episode of the Factor This! podcast.

"We ordered all the equipment. We didn't know where it was all going to go."

The coronarivus pandemic had sent steel prices soaring and tripled delivery estimates in some cases.

Utility-scale solar developers needed the improved reliability and certainty that domestic manufacturing can provide.

In addition to purchasing new equipment, Nextracker reshored some from China. And, while the company maintains a global footprint with operations in nine countries, strategic regional investments were made throughout the U.S. to reduce risks and meet customers where they are.

"Leadership is not going with the herd," Shugar said. He said a number of companies were "hunkering down" and waiting until things stabilized.

"We decided that we are going to move forward. We are going to invest in the States. We're going to source U.S. steel. We're going to get lower-carbon steel. And we're going to hit high on-time delivery metrics. Full stop," he said.

New analysis of global solar supply chains from the International Energy Agency determined that world leaders must intervene to diversify the entire manufacturing lifecycle — from raw material processing to panel assembly.

China controls 80% of key manufacturing stages for solar modules, according to the report, while the country's share of polysilicon and wafer supply could reach 95% in the coming years.

On July 12, more than 400 clean energy companies signed a letter urging leaders in Congress to act on legislation that would provide billions of dollars to address the disparities.

Nextracker founder and CEO Dan Shugar

The companies, through the Solar Energy Industries Association, are advocating for congressional action on the Solar Energy Manufacturing for America (SEMA) Act, which would provide incentives for domestic manufacturing throughout the solar supply chain.

SEMA would create tax incentives of 11 cents/watt for integrated modules, 4 c/w for cells, $12/sq. m. of wafer, and $3/kg of polysilicon. Production of non-integrated solar modules would receive 7 c/w. Production of solar trackers and inverters would also receive credits.

Shugar said incentives could help Nextracker "do a lot more" domestically by expanding existing facilities, like the ones unveiled in Texas, Arizona, and Pennsylvania. It's much easier, he added, to increase capacity at a factory than to build a new one.

Shugar called on those throughout the solar value chain to make investments now rather than later. Waiting for an advantageous policy may not be enough.

"At this point in my career, it's about delivering exemplary products and services reliably for customers, making decisions to enable that," he said, and not "making excuses about what might be happening in a faraway place."