(Credit: Enel)Enel is planning to build one of the largest solar module manufacturing sites in the United States, with a potential capacity of up to 6 gigawatts, opening a door for domestic renewable energy production that can help meet the rapidly increasing demand in the country.
The company, one of the biggest clean energy developers, says the Inflation Reduction Act played a primary role in its plan to expand solar cell production in the US. The US is seeking to rapidly increase renewable energy implementation as part of emissions reduction goals, but also move toward the systems being produced domestically. Currently, most solar energy materials are imported from Asia.
The Enel plans call for a manufacturing site with an initial capacity of 3 GW, with construction set to begin in the first half of 2023, and production to commence by the end of 2024. Its US factory will be the Italian company’s second solar manufacturing facility, with the expansion of its site in Sicily set to increase capacity from 200 megawatts to 3 GW.
Enel says the planned facility, through its solar panel and cell maker 3Sun, is expected to be among the first in the US to produce solar cells. There are currently fewer than five large-scale solar manufacturing sites of greater than 1 GW in the US, while demand for solar energy rapidly increases, according to the company.
Renewable energy is often the first piece of net-zero targets across industries as well as internationally. The International Energy Agency estimates clean energy investments need to reach approximately $4 trillion by 2030 to meet 2050 net-zero aspirations.
The US added a record 13.2 GW of utility-scale solar capacity in 2021, according to the Energy Information Administration, and 5.4 GW of small-scale capacity. However, nearly 80% of solar panel shipments were from Asia, according to the EIA.
Those imports in part have led to the increase and fluctuations in renewable energy prices. LevelTen Energy had solar power purchase agreement prices up 8% in the second quarter of 2022 in part because of import and tariff concerns, and overall renewable energy PPAs up nearly 10% in the third quarter with continued strong demand coupled with supply constraints.
The Inflation Reduction Act, with nearly $370 billion allocated for energy programs, has significant incentives for domestic renewable energy manufacturing with a goal of ending that reliance on imports. It includes $10 billion in tax credits for clean energy manufacturing. There are also tax incentives for energy producers that use domestically manufactured materials.
"Recent policy tailwinds from the Inflation Reduction Act have served as a catalyst for our solar manufacturing ambitions in the US, ushering in a new era of made-in-America energy," says Enrico Viale, head of Enel North America. "With this announcement, it is our intention to bolster a robust domestic solar supply chain that accelerates and strengthens the US's transition to clean energy.”
Enel is currently looking for a site for its US facility. The Wall Street Journal estimates the project could top $1 billion.
