The United States manufactured only 7 percent of the world’s solar panels last year, according to the Energy Department. That’s down from 27 percent in 2000 and 43 percent in 1995. Most solar panels are now manufactured in China, where more lax labor laws make it cheaper to manufacture and deliver solar panels.
“This certainly helps, but just to put it in perspective, the chinese government is dealing in billions when they support these areas, not millions” Craig Lund, vice president of business development at 1366 Technologies, told VentureBeat. “U.S. market share has dropped precipitously in the past decade while China has done a lot to subsidize manufacturing.”
The new investments, which will come over the course of two years, are geared toward companies that reduce the cost of manufacturing solar panels and scaling up solar-panel production. But reducing the cost of manufacturing solar panels won’t necessarily give the U.S. a competitive edge in producing them, Kachan & Co. managing partner Dallas Kachan told VentureBeat.
“The biggest challenge in solar-cost reduction is not module price, but balance-of-system costs,” he said. “It takes time and money to fasten panels in place, run cabling and install inverters.”
But there is renewed interest in manufacturing in the United States thanks to favorable exchange rates. That’s prompted companies like silicon wafer producing company 1366 Technologies, which recently filed for a conditional Department of Energy loan, to reconsider manufacturing stateside. The investment from the Department of Energy is a small step in that direction, Lund said.
“Generally, the exchange rate is moving in our favor,” Lund said. “The time is right. It’s as good as it’s been in a while.”
The investment is part of the U.S. Department of Energy’s SUNSHOT initiative, which is attempting to bring the cost of electricity for solar panels down to around 6 cents per kilowatt-hour. That would make it more competitive with other kinds of power like fossil fuels, which enjoy much lower costs per kilowatt-hour of electricity and do not carry the same upfront capital costs solar panels have.