According to research done at Lazard Capital, the solar industry is forecasted to be the fastest growing segment of the global power market, with a projection of an additional 50 gigawatts (GW) to be installed by 2015.
The Solar Energy Industries Association’s (SEIA) Solar Market Insight Report, states the U.S. had a successful and strong Q1’13, with the installation of 723 megawatts (MW). The SEIA also found that 48% of all new electric capacity during Q1 came from solar power. SEIA concludes in their report that the success in Q1’13 is an indication that the U.S. is going to have another record year for the solar industry.
Therefore with a growing domestic demand, purchasing solar cells and modules from overseas may not be the most economical choice for solar consumers and developers in the United States. A senior energy analyst, who recently spoke at Intersolar North America in San Francisco, stated that localized manufacturing and production of solar cells and modules will benefit the United States. Ultimately, it will be cheaper for end users and developers to purchase solar cells or modules from domestic manufacturers; due to shipping and tariff costs that are included when being imported from overseas. According to Sanjay Shrestha, managing director at Lazard Capital, the prices for Unites States’ manufactured solar panels could be as much as 10% cheaper than solar panels coming from China. Although China currently has 30% lower production costs than the US, the return on investor capital (ROIC) would be 8.3%, which is lower than the 10.8% ROIC of the US for a 1 GW system.
Benefits of manufacturing domestically in the US:
- improve working capital management
- create more jobs for Americans and utilize local workforce
- shorter lead times with intensive quality control
- a sustainable supply chain
Suniva, one of America’s leading manufacturers of high-efficiency and cost competitive solar cells and modules, is a prime example of a successful solar manufacturing plant located in the US. Suniva has experienced unprecedented sales bookings in Q1’13, allowing the company to expand its module assembly operations. This expansion will allow for 24/7 operations of solar modules, along with the hiring of 48 new employees. Greg Mihalik, vice president of manufacturing and operations said in a recent press release, “Suniva is currently sold out of capacity for Q2’13, which is extremely satisfying to know that our products are so well-received by our customers and distributors”. This year Suniva was awarded with “Manufacturer of the Year” for their products’ quality and reliability, allowing the company to set standards in the global PV marketplace.