The U.S. government is now accepting comments on a proposed waiver to the Build America, Buy America Act. The Depts. of Energy, Agriculture, and Housing and Urban Development, along with the Environmental Protection Agency, have all proposed a one-year waiver of the manufactured product requirements for domestically assembled solar panels used in federal infrastructure projects. Due to the lack of domestically assembled solar panels using American components, the groups are proposing to waive their required use through Dec. 31, 2025.
The “buy America” preference was established as part of the Infrastructure Investment and Jobs Act signed by President Joe Biden in 2021. It requires all iron, steel, manufactured products and construction materials used in infrastructure projects that receive federal financial assistance be produced in the United States. Solar panels are required to be assembled in the United States and have 55% of their total cost of components be mined, produced or manufactured domestically.
According to Dept. of Energy analysis, the cost of a solar cell is estimated to constitute 67% of the total module cost. The next highest-cost component is the metal frame at 10% With solar cells “not likely…available from U.S. manufacturers in sufficient quantities until Dec. 2025 or later,” and “metal frames…expected to be unavailable at a significant quantity from anywhere other than China for several years,” the DOE and the other government groups have suggested a waiver to the Act requirements.
The groups said that although the United States currently has 10.6 GW of annual thin-film production capacity and 47 GW of annual silicon capacity, the country is producing much less. Due to foreign competition, workforce shortages and obsolete production equipment, the groups estimate that 3.7 GW of silicon solar panels were actually produced and sold in 2023, despite a nameplate capacity of 15 GW.
Domestic silicon solar cell production just restarted (Suniva in Georgia), and more outfits should begin production in 2025 (Qcells, Silfab, etc.). The government groups are confident that future domestic manufacturing growth will result in more Build America, Buy America-compliant modules after the waiver expires.
Mike Carr, executive director of the Solar Energy Manufacturers for America (SEMA) Coalition, said in a statement that he disagreed with the waiver and thinks the federal government should be paying more attention to foreign players establishing U.S. manufacturing operations.
“While we appreciate the balance the administration is attempting to strike by supporting swift energy deployment, American solar manufacturers will have more than enough capacity to support these projects over the next three years,” he said. “At the very least, the administration must impose Foreign Entity of Concern (FEOC) restrictions before finalizing these waivers so Chinese companies assembling solar panels in the United States don’t receive American taxpayer dollars via government purchasing.”
The waiver, suggested through the end of 2025, would require solar panels to be installed (permanently fastened to an outdoor support structure at the project site) by June 30, 2026.
The federal government is accepting comments on the waiver through Dec. 28, 2024. Comments should be sent to the email address included in the waiver announcement.
