Enel, a world leader in clean energy, plans to construct one of the largest solar module manufacturing facilities in the United States, with a potential capacity of up to 6 gigawatts. This paves the way for domestic renewable energy production to help fulfill the country’s fast-growing demand.
Inflation Reduction Act: A Catalyst for Our Clean Energy Transformation
According to the company, the Inflation Reduction Act was a critical factor in its decision to increase solar cell production in the United States. The U.S. is attempting to rapidly expand renewable energy deployment as part of its emissions reduction goals while simultaneously shifting toward systems manufactured locally.
Enrico Viale, the CEO of Enel North America, cited laws passed in August by the Biden administration as the motivation for the company’s decision:
“Recent policy tailwinds from the Inflation Reduction Act have catalyzed our solar manufacturing ambitions in the U.S., ushering in a new era of made-in-America energy. With this announcement, we intend to bolster a robust domestic solar supply chain that accelerates and strengthens the U.S.’s transition to clean energy.”
When Will Enel Start Building the Facility?
According to Enel’s plans, construction on a manufacturing facility with a 3 G.W. initial capacity will start in the first half of 2023, and production will begin by the end of 2024. The Italian company’s U.S. factory will become its second solar manufacturing facility when completed. Meanwhile, its site in Sicily will be expanded to increase its capacity from 200 megawatts to 3 G.W.
Enel, through its solar panel and cell manufacturer 3Sun, expects the planned facility to be among the first in the Us to create solar cells. According to the company, the U.S. currently has less than five large-scale solar manufacturing facilities of more than 1 G.W., despite rapidly growing demands for solar energy.
Meanwhile, Wood Mackenzie and SEIA predict that annual U.S. solar P.V. installations will increase from 16 G.W. in 2022 to 41 G.W. by the end of 2025.
Ending Reliance on Imports
Renewable energy is usually the first part of net-zero goals in many industries and globally. Estimates made by the International Energy Agency show that clean energy investments must reach around $4 trillion by 2030 to achieve the 2050 net-zero targets.
According to the EIA (Energy Information Administration), the U.S. added 5.4 GW of small-scale capacity and a record 13.2 GW of utility-scale solar capacity in 2021. However, the EIA reported that roughly 80% of solar panel shipments came from Asia.
These imports are partially to blame for the rise and fluctuations of renewable energy prices. Due partly to concerns about imports and tariffs, LevelTen Energy saw an 8% increase in solar power purchase agreement prices (PPA) in the second quarter of 2022. Overall renewable energy PPA prices increased by almost 10% in the third quarter due to ongoing high demand and supply limitations.
With roughly $370 billion in funding for energy programs, the Inflation Reduction Act provides significant incentives for domestic renewable energy manufacture, intending to eliminate dependency on imports. The legislation includes a tax credit of $10 billion for clean energy manufacturing. Additionally, there are tax incentives for energy producers who use locally manufactured resources.
Where Will Enel Build the Facility?
Enel is currently scouting locations for its U.S. facility. According to the Wall Street Journal, the project might cost more than $1 billion. Giovanni Bertolino, the head of 3Sun USA at Enel, responded to Electrek’s question regarding the factory’s location:
“Enel is currently evaluating prospective sites for the facility, taking into consideration factors like land availability, the presence of a skilled workforce, connections to transportation networks, and tax and incentive structures. We plan to make a final site selection by the end of 2022 and anticipate the facility would start production at partial capacity by the end of 2024, with full capacity in 2025.”
This expansion is expected to result in up to 1,500 new jobs. It will also strengthen the U.S. solar P.V. supply chain by expanding domestic production of solar cells and panels.
