The Status of US Solar Manufacturing, One Year After Tariffs
On Tuesday, JinkoSolar will officially open its Jacksonville, Florida solar module factory.
The Chinese company announced that plant in January of last year, roughly a week after the Trump administration unveiled its final tariffs on crystalline silicon solar cells and modules. It was the first of a string of such announcements as foreign manufacturers stared down the threat of trade duties, which took effect last February.
It’s been months since many of those announcements became public, so Greentech Media checked in on the progress. It turns out that some manufacturing pants are online, some are still on the way and at least one plant has been scrapped.
In announcing Section 201 tariffs, President Trump promised they would buoy U.S. solar manufacturing and create “lots of really great jobs with products that are going to be made in the good old USA.” So far, the results have been mixed.
Jinko, Hanwha and LG
Though the official opening is Tuesday, Jinko began pilot production at its plant in November of last year. On the company’s third-quarter earnings call, CFO Haiyun Cao said the plant is expected to be fully ramped by early 2019. A spokesperson for Jinko confirmed that hiring was on track, with more than 100 people employed so far.
The plant should ultimately reach 400 megawatts in solar module capacity and employ about 200 people. Jinko declined to comment on further manufacturing expansions in the U.S. or abroad.
Hanwha Q Cells provided few details about the progress of its Whitfield County, Georgia module factory. The company did confirm that the project will be 1.7 gigawatts when fully ramped. When it announced the project, Hanwha said capacity would exceed 1.6 gigawatts and construction would be finished in 2019.
John Taylor, senior vice president at LG Electronics USA, said construction of LG Solar’s Huntsville, Alabama solar module plant is almost finished. The project adds to LG’s existing operations in Huntsville, where it has had a presence for four decades.
“This is an existing building, so the build-out was faster than a greenfield kind of plant,” Taylor said. “The equipment has been installed and is being fine-tuned.”
Some pilot production has already begun, with full manufacturing scheduled to commence in mid-2019. Taylor would not confirm whether that meant Q2 or Q3. Once fully ramped, the plant will have the ability to produce 500 megawatts of solar modules per year.
Though Taylor said the plant is “highly automated,” LG is in the midst of hiring and expects to bring on 159 employees. LG said it has no additional plans for expansion of its solar manufacturing.
Heliene’s ups and downs
A Minnesota factory built by Canadian firm Heliene was the first foreign-owned manufacturing plant to begin rolling modules off the line post-tariff announcement. Production began in the last week of August, and the plant is now fully ramped to its 140-megawatt capacity.
Ahead of production, Heliene said the plant would create 130 jobs in the state’s Iron Range region. So far there are only 97 employed at the plant, but President Martin Pochtaruk said that number will increase when a fourth crew starts working weekends in May.
As the Minnesota operations grow, Pochtaruk said Heliene’s Canadian manufacturing has declined; its Canadian plant is operating at half its 250-megawatt capacity.
“We went from having four crews and working 24/7 to having only two crews working four days a week,” said Pochtaruk. Most of the product from Canada, 75 to 80 percent, goes to the U.S., meaning the company is still paying tariffs on a chunk of its modules.
Back in the summer, Heliene had plans to take over another 75-megawatt manufacturing plant in Oregon, formerly owned by Suniva. Pochtaruk said the company canned the project this fall because it determined operational costs were too high. Heliene doesn’t have any other current plans for more manufacturing capacity.
The outcome of SunPower’s SolarWorld acquisition
A recent financial filing showed just how much SunPower paid for the assets of SolarWorld Americas: $30.1 million. The California-based company bought the bankrupt SolarWorld along with its Hillsboro, Oregon manufacturing plant in a possible bid to garner enough favor with the administration to gain a tariff exemption.
In September, SunPower got it, allowing the company to save up to $2 million a week in tariffs. Now the company is moving ahead with its plans to manufacture in the U.S. CEO Tom Werner said the company moved equipment in November and December and produced its first module in Oregon before Christmas.
The CEO said the plant will ramp to full production in the next few months, and SunPower will ship its first product out of Hillsboro before March 1.
“Then we’ll look at further investment toward the middle of the year, where we would perhaps make other modules there,” Werner said. “There is potential for partners to use that facility as well, or to have us make modules for them.”
According to Werner, discussions for those partnerships are still in preliminary stages.
Silfab expansion
Silfab, a Canadian-based manufacturer, bought a Washington plant from Bellingham-based manufacturer Itek in August. The company is now in the process of doubling capacity there, to about 300 megawatts. Geoff Atkins, an executive adviser to Silfab, said modules will roll off the expanded line in early April, but Silfab has been running the plant since it took over in October as it builds out more capacity.
“We’ve actually divided the building in half while we add the second line,” Atkins said. Through automation, modifications and upgrades on existing equipment, he added that Silfab has doubled the number of modules it’s able to push out of the existing line, up to 1,500 per day.
Silfab said it worked to keep Itek’s employees, training them in any changes made during the updates. The plant continues to employ between 80 and 90 employees and Atkins expects that number to grow to approximately 120 when the second line goes into operation.
While Atkins said Silfab is “100 percent committed to the North American market and North American manufacturing,” he expressed skepticism about peers in the industry who he feels are dragging their feet on shipping made-in-the-U.S. products.
“There’s a lot of talk about new facilities coming online, but we have not seen some of those modules or some of those projects,” Atkins said. “Until real modules are rolling off the line, I could tell you we have gigawatts of capacity, but it doesn’t mean anything.”
Silfab has another expansion coming soon, slated for the middle of 2019. The equipment has already been ordered, according to Atkins, and now the company is choosing whether to expand in Bellingham, elsewhere in the U.S. or at its Canadian site. The company wants a location close to both labor and ports so they can deliver product quickly.
As for whether or not Trump administration tariffs spurred Silfab’s expansion plans, Atkins said they “certainly accelerated our interest, but I wouldn’t say it had a specific bearing on our focus on the U.S. market. Silfab’s core focus is working with North American residential installers, and to do that, we want to make sure we’re servicing them from the North American market.”
First Solar moves forward, REC Silicon plant shutters
Sunpreme, a bifacial solar company that in September confirmed plans to open a Texas-based facility, did not respond to requests for comment on that project’s progress by the time of publication. When the plant was announced, the company targeted production in 2019. Taiwan-based United Renewable Energy Company, a union of Neo Solar Power Corporation, Gintech Energy Corporation and Solartech Energy Corporation, was also reportedly mulling a U.S. manufacturing site in January 2018. The company did not immediately respond to request for comment.
Construction is about halfway complete at First Solar’s 1.2-gigawatt Ohio plant, which will produce the company’s tariff-exempt Series 6 modules. According to a spokesperson, construction on the shell of the facility is complete. Production tools will move into the building in the third or fourth quarter of 2019. Full production should kick off in Q1 2020, slightly after FirstSolar’s April announcement that targeted production in late 2019.
As those plans chug toward completion, some companies have also blamed tariffs for cutting down manufacturing in the U.S.
REC Silicon has been hanging on for months amid dwindling profits tied to Chinese tariffs on polysilicon. The company announced this month its Moses Lake, Washington plant would shut down. Francine Sullivan, REC’s vice president of business development, said the company believes the shutdown is only temporary.
Though polysilicon tariffs are not specifically tied to the Section 201 tariffs, the company had worked with the administration to resolve all solar-related tariffs together. Since 2014, U.S. polysilicon manufacturers have been hard hit by duties from China, a significant market. Sullivan said REC remains hopeful the administration will work toward a resolution.
“We are hopeful that the current ongoing trade talks will lead to us regaining market access in China,” she said in an email. “We are also hopeful that the market will improve later this year, which should allow us to restart the Moses Lake plant.”
Source: greentechmedia
