When Joe Biden thinks about clean energy and climate change, he says he sees jobs.
It’s a refrain the presumptive Democratic nominee has repeated many times during his campaign. He touched on that theme again this month while introducing a $2 trillion clean energy plan, promising “historic investment” in wind, solar, storage and other technologies over his first term.
In that plan, which calls for 100 percent clean energy by 2035, Biden argued that “American workers should build American infrastructure and manufacture the materials that go into it.” A policy paper put out recently by a Democratic Unity Task Force spearheaded by the Biden campaign and Senator Bernie Sanders called for made-in-America solar panels, solar roofs and community solar, all of which would support union jobs.
The emphasis on clean energy and climate change in this year’s election is an important gesture for both progressive activists — who have pushed Biden to adopt more ambitious climate policies — and for a solar industry that’s been slogging through the uncertainty caused by ping-ponging U.S. policy for years. And though achieving the solar build-out Biden envisions won’t be a terrific challenge for the maturing market, growing a U.S.-based supply chain to feed those projects could be.
Over the past several decades, U.S. solar manufacturing has slipped even as countries such as China, Malaysia and South Korea built up rosters of solar companies that produce all elements of a solar installation, and cheaply. That dynamic has not been limited to solar.
Trump has tried to reverse that dynamic through trade duties. For U.S. solar manufacturers, such duties have brought scattered success. While numerous domestic module plants sprung up in the wake of Section 201 tariffs, companies that produce polysilicon in the U.S. have suffered as China limited their access to its upstream solar market. Panasonic is set to cease the nation’s only remaining cell production, at Tesla’s New York Gigafactory, just before the 2020 election.
Within that context, Biden’s plan, and the Green New Deal he has partially embraced, is a notable pivot toward industrial policy. And the U.S.’ relatively small solar manufacturing sector could benefit.
“Joe Biden is going to look for every opportunity he can to push for more manufacturing jobs in the U.S.,” said Jeff Navin, co-founder and partner at consultancy Boundary Stone Partners, who worked at both the Labor Department and the Department of Energy during the Obama administration. “[He] certainly wants to put people to work installing solar panels, but he really wants to put people to work manufacturing the kinds of technologies that are going to be growing industries.”
How to get there
Designing policies to encourage a solar manufacturing renaissance is an area where Biden has some experience. In 2009, the Obama-Biden administration helped craft the American Recovery and Reinvestment Act, which the administration touted as providing more than $90 billion in “strategic clean energy investments and tax incentives.” Several months after Obama signed the law, Biden himself announced a $535 million loan guarantee for Solyndra, a company that manufactured cylindrical solar panels.
While the economic picture is once again grim for the U.S., much has changed in both the solar industry and the political environment in the decade since the recession of 2008 and 2009. Some manufacturers supported by the Obama-era stimulus, such as Solyndra and Abound Solar, have melted down and ceased operations, while others, including Tesla, have boomed. Electricity generation from solar has grown fortyfold since 2009, according to analysis from Environment America.
At the same time, political currents are pushing the Democratic party to more seriously consider how it will grapple with racism, economic inequality and the increasing threat of climate change. A draft of the party’s platform released last week was criticized by some as being too centrist on climate, even as Biden has incorporated more aspects of the justice-focused Green New Deal into his own plans.
Biden’s administration, should it win the White House, will have a tough task in crafting and then realizing policies to build the climate-friendly and equitable industries his campaign has called for. But former administration staff, solar advocates and manufacturers themselves say the president has several tools handy to boost U.S. solar manufacturing.
First, Boundary Stone’s Navin said the administration should capitalize on the federal government’s buying power, something Biden has suggested with a proposed $400 billion in his first term dedicated to federal procurement of clean-energy technologies. The U.S. government is one of the largest consumers of energy in the world.
Biden could also leverage the Cold War-era Defense Production Act, said John Smirnow, general counsel and vice president of market strategy at the Solar Energy Industries Association. That law gives the president “tremendous authority” to send federal money to certain contracts and amass equipment stockpiles, according to Smirnow.
Domestic content requirements for federal projects, as the draft Democratic platform proposes, could also help guarantee a market for domestic manufacturers. Navin suggested that a nationwide electricity standard, like the proposed 100 percent carbon-free by 2035, would help create policy certainty and scope for the market to grow.
“When you are making an investment decision specific to building a factory, you want to make certain that the policy isn’t going to change on you,” said Laureen Sanderson, spokesperson at 1366 Technologies, a U.S.-incubated solar wafer manufacturer. The company was approved for a DOE loan under Obama but eventually withdrew from that program and instead built a pilot plant in Malaysia last year via a partnership with Hanwha Q Cells.
Policy continuity is second only to strategic investments, matching funds or tax credits — federal, local or refundable — to help companies reduce costs so they can compete with cheaper products from abroad, said Xiaojing Sun, a senior solar analyst at Wood Mackenzie.
Biden’s administration will likely have to draw on an all-of-the-above strategy, with a specific emphasis on building out all elements of the solar supply chain.
“If you want to create manufacturing jobs, you have to provide incentives for manufacturing,” said Navin. “It’s not enough to just prop up the general economy or prop up general industries.”
Punitive measures could play a role too. Biden may choose to continue some tactics of the Trump administration, such as tariffs against subsidized solar products from China. Indeed, Biden’s goals to buoy American-made goods and President Trump’s emphasis on America First manufacturing are not so dissimilar.
Ultimately, though, Biden would almost certainly need support from Congress.
“He can certainly kick-start significant investments in solar energy manufacturing, but to really build a strong, long-term solar manufacturing base is going to require more than just existing presidential authority,” said Smirnow.
Navin said the Recovery Act — while significant — fell short in part because incentives were not wrapped into a larger climate package guiding economic and societal change. And such a package would need approval from legislators.
The challenges ahead
Political headwinds are not the only barriers a Biden administration would face in growing solar wafer, cell and module manufacturing.
In the solar industry, cost is key, and products made in China and Southeast Asia tend to be cheaper than those made in the U.S. Even with existing tariffs, solar modules from Southeast Asia and bifacial modules from abroad (taking advantage of a tariff exemption) are more cost-effective for many U.S. developers.
“China heavily subsidizes the production of its solar panels. That’s not how we run our economy,” said Navin. “In order to be cost-competitive, we have to be far more efficient.”
Getting prices down in the U.S. may also be in direct contrast with the Biden administration's goal of increasing jobs, since efficiency in solar production often means automation.
“[Many solar manufacturers] say their factories are highly automated, but on the other hand, they also like to tout the job creation numbers,” said WoodMac’s Sun. “Those two can’t be true at the same time.”
When investing in new technology development, as Biden’s plan pledges to do, the administration will also need to make sure companies don’t later decamp to greener pastures.
“1366 is a prime example [of what] can come out of this country, but you need to make certain that innovation is nurtured from the beginning right up through commercialization,” said Sanderson. The manufacturer, which spun out of a Massachusetts Institute of Technology project, maintains a small demonstration facility in Massachusetts but built its pilot facility abroad. Now it’s working on a gigawatt-scale plant. Sanderson would not elaborate on whether it will be built in the U.S. or elsewhere, though she said U.S. manufacturing remains a goal.
In solar, multinational energy companies such as Hanwha Q Cells and Jinko, rather than homegrown U.S. startups, now control most manufacturing capacity, said Sun.
Though Navin calls the 2009 Recovery Act and particularly its loan program “one of the most effective clean energy programs in the history of the United States,” the Biden administration will have to be much more aggressive to make the level of manufacturing the campaign wants to see a reality. Congressional support for ambitious and overall climate policy would also go far.
“Within the Recovery Act, we were looking for incentives, tax credits, refundable tax credits — little things here and there to nudge and encourage people to adopt clean energy,” said Navin. “If we had been able to get a broad climate bill passed, it would have fundamentally changed and altered the entire clean energy economy.”
