South Korea’s Hanwha pledges multi-billion dollar US spend ‘at critical juncture’ for solar

South Korea’s Hanwha is pledging a “multi-phase, multi-billion-dollar investment” in the US to support President Joe Biden’s high-profile strategy to create a Made-in-America solar technology supply chain.

“Our commitment to the US is more serious than ever before,” said Justin Lee, CEO of Hanwha subsidiary Q Cells, which operates the largest module production plant in the US where it is a leading player in the commercial, residential, and utility solar markets. The Georgia factory has 1.7GW annual capacity, nearly 20% of US module production capacity.

Hanwha said the US solar industry is at a “critical juncture,” noting that despite long-term efforts to decarbonise the electric grid, “the prospect of doing so with American-made products remains uncertain”.

In part, that is a consequence of most domestic solar manufacturing facilities having closed because of an inability to compete on cost against state-subsidised Chinese competition. The US relies on Chinese manufacturers for the great majority of modules and many of the key components in solar panels, including polysilicon.

The US Department of Energy (DoE) last September issued a study that forecast solar PV could provide 37-42% of national electricity demand by 2035 versus 3% in 2020. US electric power consumption was 3,800TWh in 2020, according to the latest calendar year data.

‘Clean polysilicon’ supply in focus

As part of its upcoming US solar investments, Hanwha acquired an additional 4.67% stake from Aker Solutions in Norway-based polysilicon producers REC Silicon, boosting its ownership to 21.34%, a total $204m investment. Aker and Hanwha co-own the company.

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REC Silicon owns US polysilicon manufacturing facilities in Butte, Montana, and Moses Lake, Washington, with a combined annual production capacity of 18,000 tonnes. Moses Lake can produce 16,000 tonnes of granular, solar grade polysilicon and Butte 2,000 tonnes of electronic-grade polysilicon.

The Moses Lake plant is presently idle. Hanwha did not say why, but intends to reopen it in 2023 as part of future US investments.

Unlike many plants in Asia that rely on coal power, those in the US use hydro to manufacture “clean polysilicon” whose demand is increasing as end-users look to source from suppliers with low or no carbon footprints.

REC Silicon also produces silane gas, which is used for producing hybrid electric vehicles, flat screen televisions, laptop computers, semiconductors, and smartphones.

“Increasing energy market turbulence tells us why securing key raw material production is so critical,” said a Hanwha spokesperson.

“Given upward pressure on oil prices and scrutiny over the environmentally damaging impacts from fossil fuels, we believe that strengthening the renewable-based energy supply chain is important. Producing low-carbon solar material is a good starting point to achieve the goal.”

The spokesperson stressed that the US must enact durable, long-term policies to attract and sustain domestic solar manufacturing such as ‘Buy American’ rules, “smart” trade policy, and long-lasting tax incentives.

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