Thanks to Industrial Policy, the U.S. Solar Manufacturing Industry is Booming

First Solar announced on Thursday it will invest up to $1.1 billion in its fifth U.S. production facility. It’s the latest factory announcement in an industry that has seen major growth.

Forgive me, if you will, to allow me to take a moment to reflect on the absolute 180-degree turn the U.S. domestic solar manufacturing industry has taken over the past 12 months.

Just a little over a year ago, things were looking pretty dire. The Biden administration had announced that no tariffs would be issued on solar imports for two years, despite the fact there was plenty of evidence Chinese-made panels were being shipped through third-party countries to dodge U.S. trade enforcement. China looked poised to dominate the solar market, even though there were major concerns about its use of forced labor throughout its solar supply chain. Things were so bad for Made in America solar that here at the Alliance for American Manufacturing, we held up the industry as an example of what not to do when trying to build a clean energy future.

Then came the Inflation Reduction Act, landmark legislation that incentivized U.S. clean energy production.

To say that the new law has been a game changer for America’s solar industry is an understatement. In many ways, this piece of industrial policy brought U.S.-made solar back from the dead. There have been $103 billion worth of clean energy investments made in the United States since Biden took office, the White House reports, and a whole lot of that has been in solar.

Leading the way is First Solar, which on Thursday announced it will build a fifth (!!!) U.S. solar factory in Louisiana. Set to open in 2026, the new $1.1 billion facility will manufacture the company’s Series 7 solar modules, which will be made with “100% U.S.-made components identified in the current domestic content guidance issued by the US Department of Treasury.”

The new factory is expected to employ 700 people once complete. Across the country, First Solar expects to eventually employ 4,000 people at its various facilities in states like Ohio and Alabama.

First Solar CEO Mark Widmar said:

“We are pleased to partner with Louisiana as we lean into our commitment to creating enduring value for America by expanding our solar manufacturing footprint and the domestic value chains that enable it… bringing our unique, fully vertically integrated solar manufacturing model to Louisiana, we expect the plant to mirror the commitment to Responsible Solar evident at every First Solar manufacturing facility, which are among the cleanest, safest, and most diverse in the industry. We are proud that our investment in American manufacturing will create stable, good-paying manufacturing jobs and economic and social value in the state.”

The Wall Street Journal recently noted that First Solar is one of the companies that have benefited most from the Inflation Reduction Act, and is expected to receive “as much as $710 million” this year in incentives. But it’s also worth pointing out that the company is investing billions in expanding its U.S. production footprint, enabling the United States to regain some of the solar manufacturing it lost to China over the past decade.

The reason that First Solar was primed to take advantage of the new law is that it always had a U.S. footprint. While the company has a worldwide presence, it is based in Arizona and is the only company out of the world’s 10 largest solar manufacturers not to have manufacturing in China. And importantly, First Solar’s tellurium-based semiconductor avoids the Chinese crystalline silicon supply chain. That not only gives consumers concerned about China’s use of forced labor in its solar industry another solar option, it also helps to decrease U.S. dependence on China for its solar needs.

But before you start to think I am just here to promote First Solar, I’ll point out that several other solar manufacturers have announced big investments thanks to the Inflation Reduction Act. Swiss company Meyer Berger announced a few weeks back it will build a silicon solar cell manufacturing facility in Colorado, which is set to create 350 jobs. Canadian company Heliene said in July that it will spend about $145 million on a new solar facility in Minnesota. Back in May, Enel North America announced it will make 3-GW solar cells in Oklahoma, a $1 billion investment that may eventually create 1,900 jobs.

These are just recent announcements.

Things are indeed looking up for the U.S. domestic solar manufacturing industry, and there’s a lot to be optimistic about. But we’ve been here before — and there’s a whole lot that could go wrong.

For one, there is a potential that House Republicans will make big cuts to the Inflation Reduction Act, which would kneecap the law’s ability to incentivize domestic production not just for solar but for other critical clean energy sectors. Even for those Members not worried about the law’s clear climate goals, the fact that China already has such a big lead in these industries should be troubling. The United States is finally back in the race — we shouldn’t hit the gas right as there is momentum.

But it’s not enough to invest; the United States also must be willing to enforce its trade laws. When the Biden administration opted to pause solar tariffs last year, it did so under the guise that imports were still needed in order for the U.S. to reach its climate goals while giving time for the U.S. industry to scale up. And the administration doubled-down on that argument when President Biden vetoed Congressional action to reinstate the tariffs.

Guess what? Now the American solar manufacturing industry has scaled up. We know that China will do anything it can to undermine this progress and retake market share because China has done it before. When Biden’s tariff pause ends, it needs to end for good.

If the United States gets the policy right, the rebirth of the U.S. solar manufacturing industry could very well go down as one of the major policy achievements of the 21st century — and serve as the model for how the United States can strengthen and rebuild other critical industries.