{"id":100212,"date":"2022-10-25T08:00:30","date_gmt":"2022-10-25T13:00:30","guid":{"rendered":"https:\/\/www.solarpowerworldonline.com\/?p=100212"},"modified":"2023-03-01T08:51:35","modified_gmt":"2023-03-01T13:51:35","slug":"who-benefits-most-from-manufacturer-tax-credits-in-ira-thin-film-or-crystalline-silicon","status":"publish","type":"post","link":"https:\/\/www.solarpowerworldonline.com\/2022\/10\/who-benefits-most-from-manufacturer-tax-credits-in-ira-thin-film-or-crystalline-silicon\/","title":{"rendered":"Who benefits most from manufacturer tax credits in IRA, thin-film or crystalline silicon?"},"content":{"rendered":"

When the average person thinks about a solar panel, they\u2019re usually envisioning a crystalline silicon solar module. Silicon-based solar panels are the most dominant model on the market, holding somewhere between 90 and 95% of the global production market share. The other main module type is thin-film solar<\/a>, typically made with cadmium-telluride (CdTe) deposits.<\/p>\n

Without getting too bogged down with historical details<\/a>, the first solar panel was invented in the United States in 1954 through silicon testing, and the material has remained the dominant option in the solar market<\/a>. Most early research and investment dollars were thrown at silicon designs, and today there is a robust, global silicon supply chain. But CdTe thin-film technology, championed by manufacturer First Solar, has found a niche supplying the utility-scale market and is still an important contributor to our greener future.<\/p>\n

But the manufacturing processes for crystalline silicon and thin-film solar are different, and it appears the new manufacturing tax credits in the Inflation Reduction Act will benefit thin-film the most at the start. Here\u2019s why.<\/p>\n

Solar panel manufacturing processes<\/strong><\/h4>\n
\"\"<\/a>

Crystalline silicon solar cells. Credit: Meyer Burger<\/p><\/div>\n

A crystalline silicon solar panel first starts as metal-grade silicon. A company purifies that into solar-grade polysilicon. Then it is shaped into ingots, which are cut into silicon wafers. The wafers are doped to make silicon cells, which are then finally assembled into a solar panel. There are a few solar companies that handle multiple steps in this process, but, mostly, crystalline silicon solar panel manufacturing is fragmented. Currently, the United States only has final solar panel assembly plants \u2014 a U.S. solar panel maker must buy solar cells from overseas, and those solar cells are probably made from another company\u2019s solar wafers, and so on up the chain.<\/p>\n

\"\"<\/a>

First Solar thin-film manufacturing<\/p><\/div>\n

Meanwhile, CdTe thin-film solar panel manufacturing has fewer cooks in the kitchen. Generally, cadmium and tellurium are vapor-deposited on glass like a wafer, lasers cut \u201ccells\u201d in the deposit for interconnection lines and conductors and another piece of glass finishes the panel. Everything is completed on the same final unit on one manufacturing line. Where a crystalline silicon panel maker depends on outside suppliers for its silicon product, a CdTe thin-film panel maker produces almost everything in-house.<\/p>\n

The IRA established manufacturing tax credits of 7\u00a2\/WDC <\/sub>for modules, 4\u00a2\/WDC <\/sub>for cells, $12\/m2<\/sup> for wafers and $3\/kg for solar-grade polysilicon.<\/p>\n

A U.S. crystalline silicon panel assembler would receive $29.40 in credits per 420-W module.<\/p>\n

A U.S. thin-film panel manufacturer, on the other hand, would receive $75.84 per 420-W module, based on the company technically making its own cells and wafers in-house (SPW<\/em> determined this rough math using a First Solar spec sheet).<\/p>\n

At first glance, thin-film solar module manufacturers have a clear monetary advantage to ramp production. But crystalline silicon panel manufacturers are also incentivized \u2014 to innovate higher-power products and bring their fragmented supply chain in-house.<\/p>\n

How credits will change the domestic manufacturing landscape<\/strong><\/h4>\n

Both types of solar panel manufacturers were included in Senate Committee on Finance discussions on how best to structure credits in the IRA. Scott Moskowitz, senior director and head of market intelligence, public affairs and marketing for crystalline silicon panel manufacturer Qcells North America, said the purpose of the legislation is to make U.S. manufactured solar more competitive with foreign-made solar, no matter the technology type.<\/p>\n

\u201cThe Senate wanted to ensure the credit was \u2018technology-neutral,\u2019 so if you had a vertically integrated crystalline silicon PV manufacturer and a vertically integrated thin-film manufacturer (even though thin-film tends to be vertically integrated already), you wouldn\u2019t have one disadvantaged against the other,\u201d he said. \u201cYou don\u2019t have one manufacturer getting more tax credits than another for a product that essentially does the same thing.\u201d<\/p>\n

Having a credit based on wattage also encourages manufacturers to improve their technology outputs to grab more credits.<\/p>\n

\u201cIt incentivizes innovation,\u201d Moskowitz said. \u201cYou get more credit on a per-watt basis if you have a higher-wattage panel or a more efficient cell.\u201d<\/p>\n

The credits are available for 10 years, with a phasedown in the latter years. With some factories taking a few years to get started, new facilities and expansions will be announced quickly to capitalize on the credits. Toledo Solar, a small-scale CdTe thin-film panel maker, operates a 100-MW factory in Perrysburg, Ohio, and is banking on the full suite of manufacturing credits available to thin-film companies to grow its annual capacity<\/a> to 2.8 GW by 2028.<\/p>\n

\"\"<\/a>

Credit: Toledo Solar<\/p><\/div>\n

\u201c[IRA credits] allow us to further lower the cost of manufacturing, which is critical for a level playing field,\u201d said Aaron Bates, CEO of Toledo Solar. \u201cSecond, it gives confidence to the world of finance. That\u2019s critical for us; that\u2019s critical for everyone. When there\u2019s actual commitment from the federal government, it gives the financial markets the expectation of stability \u2014 that this industry won\u2019t get swept away like it did in 2010.<\/p>\n

\u201cThese are not small numbers,\u201d he continued. \u201cFor us, you\u2019re talking $40 million per leap of growth, from 100 to 300 MW, 300 to 600 MW, etc. For First Solar, they\u2019re doing billion-dollar projects. These are not small endeavors.\u201d<\/p>\n

Qcells will spend $170 million<\/a> to build a 1.4-GW solar module assembly plant in Georgia, and even the 7\u00a2\/WDC <\/sub>credit afforded to modules will be a big help. Hanwha Group, Qcells\u2019 parent company, is planning on investing in all areas of the silicon solar supply chain, so we may soon see the country\u2019s first vertically integrated crystalline silicon solar panel manufacturer.<\/p>\n

\u201cThis is a multi-phase, multi-billion-dollar investment plan. We need to figure out how to build this complete value chain all the way from polysilicon to module,\u201d Moskowitz said. \u201cFolks in Washington want to see this policy work. They want to see a big investment from it.\u201d<\/p>\n

Thin-film panel manufacturers may see an easier path to maximizing the available credits, but all manufacturers in the solar panel supply chain stand to gain from the IRA.<\/p>\n","protected":false},"excerpt":{"rendered":"

When the average person thinks about a solar panel, they\u2019re usually envisioning a crystalline silicon solar module. Silicon-based solar panels are the most dominant model on the market, holding somewhere between 90 and 95% of the global production market share. The other main module type is thin-film solar, typically made with cadmium-telluride (CdTe) deposits. Without…<\/p>\n","protected":false},"author":1401,"featured_media":100104,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":""},"categories":[3004,7,2650],"tags":[5544,5463],"yoast_head":"\nWho benefits most from manufacturer tax credits in IRA, thin-film or crystalline silicon?<\/title>\n<meta name=\"description\" content=\"When the average person thinks about a solar panel, they\u2019re usually envisioning a crystalline silicon solar module. 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