US clean energy production is 'an economic imperative'
New legislation that would grant tax credits to accelerate solar energy manufacturing in the U.S. aims to make America competitive with China, in an industry China dominates globally. Georgia Senator Jon Ossoff (D), the bill's sponsor, said it could also create up to 60,000 new jobs in the next decade.
In an interview with Yahoo Finance Live, Ossoff framed the race to manufacture clean energy domestically as a 'national security imperative' and a 'major' job creation opportunity.
"It is an environmental imperative, an economic imperative, and a national security imperative that we be energy independent and that the United States have the capacity to produce all of the technology necessary to accelerate this transition to clean energy," Ossoff said. The Solar Energy Manufacturing for America Act aims to accelerate domestic manufacturing by offering tax credits at all stages of the solar supply chain. The fully refundable tax credit would allow companies to front-load capital expenditure and rapidly scale production domestically for components and materials, including photovoltaic cells, modules, and polycrystalline silicon, Ossoff said. The incentives would be available through 2028, and phased down over the next two years.
"This transition to clean energy is happening. It's necessary. The science is definitive," Ossoff said. "The United States needs to be a key player in the production of this technology. We can't allow China to monopolize this market."
While the early growth of solar technology was fueled in part by investments in the U.S., Japan and Germany, China has come to dominate the global supply chain for more than a decade. The growth has been accelerated in large part by pouring billions of dollars in subsidies into home-grown players.
More than 70% of the world's polysillicon is manufactured there today, with a majority of that production coming from, the troubled Xinjiang region, where the U.S. has accused China of carrying out a genocide. That reality has put the Biden administration in an uncomfortable position, as it sets the country's electricity grid on a path to be carbon free by 2035.
On Wednesday, the Biden administration took additional steps to pressure China's solar industry, banning imports from a major Chinese firm accused of using forced labor in Xinjiang, and placing four firms involved in silicon production on a trade blacklist.
Ossoff's push to onshore solar manufacturing is driven in part by a desire to accelerate the industry's growth in his home state of Georgia, which hosts the Western Hemisphere's biggest solar panel manufacturing plant, the Hanwa QCells facility.
"Georgia is the national leader in the production of solar modules. Georgia is the hemispheric leader in the production of solar modules," Ossoff said. "This is a huge economic opportunity for my state."