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The U.S. solar energy industry has succeeded in doing something that would have been hard to imagine a few years ago: It has officially built more than enough factories to meet the country’s demand for solar panels.
The nation can now produce nearly 52 gigawatts of solar panels each year, per a new tally from the Solar Energy Industries Association. That’s up from the 40 GW of capacity reported in late 2024. These numbers don’t count actual production, which is subject to factors like staffing and market demand, but rather what the industry is capable of. Current capacity exceeds the module component of SEIA’s goal from 2020, which was for the whole solar supply chain to hit 50 GW by 2030.
The factory buildout employs workers across the U.S. in high-tech manufacturing roles and diminishes reliance on China, the long-time leader in solar manufacturing. But solar panels, which industry insiders refer to as modules, are just the last step of the solar supply chain: Currently, U.S. factories assemble modules from solar cells that are almost exclusively produced overseas. Those cells, which convert sunlight into electricity, incorporate wafers that are meticulously sliced from silicon ingots; factories that make ingots, wafers, or cells are more complex and capital-intensive than module assembly plants.
Those precursor steps have lagged behind the U.S. module buildout, but companies have pledged to build factories for 56 GW of solar-cell capacity in the next few years, SEIA said. Those proposed projects, if they get built, would meet the needs of the newly revitalized U.S. solar-panel industry. But erecting solar-cell factories requires a step change in capital investment compared with module assembly.
In November, legacy solar manufacturer Suniva kicked off the first new domestic cell production since U.S. producers (Suniva included) succumbed to competition from China in the 2010s. ES Foundry launched pilot cell production at its South Carolina plant in January. The company plans to employ around 500 workers by this summer and ramp up to 3 GW of annual production capacity by the end of September.
Five more cell factories are under construction, per SEIA. They include QCells’ complex in north Georgia, which should bring 3.3 GW of cell production online later this year, and Silfab Solar’s 1 GW plant in South Carolina.
But President Donald Trump swiftly attacked his predecessor’s investments in clean energy, signing an order on his first day in office to “immediately pause the disbursement of funds” from the Biden administration’s landmark climate and infrastructure laws. That order targets grants, loans, and other appropriated funds and therefore does not seem to affect tax credits, Canary Media previously reported. But the move has sown confusion in clean-energy markets and could presage attempts to undo the legislation that created the tax credits.
Some companies are thus holding back on solar-cell factory investments until they see what the Trump administration does with a key manufacturing tax credit, which has proven vital to secure construction loans.
The rebirth of U.S. solar manufacturing had to start somewhere, and assembling panels made sense as that first step. Now, all those panel makers could become anchor customers for the next link in the chain — the proposed cell manufacturers. But making that jump isn’t so easy.
Take the case of Heliene, a company based in Ontario, Canada, that nonetheless has established its bona fides as a committed U.S. solar manufacturer.
Heliene opened a solar-module factory in Mountain Iron, Minnesota, back in 2017, during the first Trump administration. The company later expanded that facility to assemble 800 megawatts of panels per year with a staff of 320 workers. Another expansion is already underway to grow that workforce to 520 and capacity to 1.3 GW by April.
In November, when previously bankrupt Suniva began the first U.S. cell production in years, Heliene swooped in to purchase every cell Suniva’s new factory could make. Heliene could, for the time being, tout its products as the only U.S.-built modules filled with U.S.-built cells.
Now Heliene is working on its boldest move yet: a $200 million solar-cell factory to be built somewhere in the U.S. in partnership with India’s Premier Energies. But Heliene founder and CEO Martin Pochtaruk told Canary Media in January that he couldn’t make the final call on that plant given the uncertainty around what will happen to Biden-era tax credits under Trump.
Building a cell factory requires a significant step up in dollars and complexity compared with a module-assembly plant, Pochtaruk explained. Putting panels together is a largely mechanical task that costs around $30 million of capital investment for every GW of production, he said.
Solar-cell production costs more than four times that, at about $130 million per GW, Pochtaruk noted. “It’s a chemical process that is much more complex. You need to build a clean room that is similar to an operating room, but industrial-sized.”
Cell production exposes silicon wafers to chemicals in liquid and gaseous forms, which must unfold in precisely calibrated environments, Pachtaruk added. Water used in the process requires treatment before it can be reused or sent to the sewer. The equipment to do all these things drives up costs relative to module assembly and makes permitting more complicated.
That raises the stakes for anyone looking to put their chips on the table for American solar-cell production — even if they’ve already found success in their panel-assembly bets. The prospects of financing these bigger bets are intimately tied to the future of federal manufacturing tax credits, part of the Biden policies that Trump has vowed to dismantle.
Even successful solar manufacturers typically don’t want to fork over their own cash for the hefty expense of a new cell factory. They turn to lenders to finance construction costs. But lenders have a hard time loaning money to a type of business without much of a track record to evaluate, and the current U.S. cell-manufacturing landscape is mostly nonexistent.
Cell manufacturers have something else going for them, though: the 45X tax credit. As enacted in the Inflation Reduction Act of 2022, 45X awards a set amount of money for each key solar component that a company makes in the country in a given year. If the manufacturer doesn’t have enough tax liability to absorb all that credit, it can sell the credits to another entity, generating cash to pay down debt or invest in further expansion.
Heliene pulled that off last fall with 45X credits from module production and netted about $50 million from the transaction.
Financial institutions mulling a $100 million–plus loan to a solar-cell manufacturer want to use the future 45X credit as collateral, Pochtaruk said. Future cell sales may be hard to predict, but a guaranteed payout based on the number of cells produced is easy to model (at least in a world where the U.S. government honors legally binding contracts and pays its obligations).
“Lenders will not agree to come forward until there’s clarity” on the long-term status of the tax credits, Pochtaruk said. So Heliene is still finalizing a location in the U.S., tabulating construction costs, and then will need to make a final call on the investment by late April. A Premier Energies executive told investors Monday that the plan is on pause pending clarity on the fate of the tax credits.
The potential loss of tax credits may be less consequential to companies like Qcells, which can draw construction funds from its corporate parent, Korea’s Hanwha. A smaller solar-focused company like Heliene doesn’t have other corporate coffers to rely on in lieu of tax-credit–based financing.
It’s still entirely possible that the credits will survive. Under normal circumstances, it would take a new act of Congress to undo them. A cadre of Republicans in Congress has publicly urged leadership to preserve them, based on the economic benefits they bring to their districts. Meanwhile, SEIA coordinated a lobbying push on Capitol Hill Wednesday to meet with more than 100 members of Congress or staff to urge them to protect the credits.
The current uncertainty, though, is at the very least delaying the commitment of more private funds to build solar-cell factories. Those projects — and the high-tech, well-paying manufacturing jobs they come with — could collapse altogether if the situation persists or Congress undoes the recently created tax credits.
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