LegiStorm

Summary:

Over the last 15 years, solar photovoltaics (PV) has developed from a niche electricity generation technology to the most rapidly expanding renewable energy (RE) resource. During this period, major developments have occurred in the solar PV industry and in related policy areas including (1) a greater than 80% reduction in component and systems costs; (2) enactment of laws modifying federal support for solar PV, including tax incentives; (3) changes in conditions relating to international trade policies; and (4) modifications of state solar energy policies. Cost improvements have been driven by several factors. These factors include research, development, and demonstration of improved manufacturing equipment and processes; improved solar PV system designs and efficiencies; and investment in manufacturing that has resulted in greater capacity, economies of scale, and other cost benefits. Congress passed the Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) and P.L. 117-169 (commonly referred to as the Inflation Reduction Act, or IRA). The IIJA appropriated funding for various energy-related research programs, grant programs, federal procurement initiatives, loans, and loan guarantees. The IRA modified and extended tax incentives such as the Advanced Manufacturing Production Credit, the Investment Tax Credit, and the Production Tax Credit. Since 2012, the United States has imposed various import restrictions on solar PV components and systems. These include antidumping and countervailing duties on solar PV components made in China; “safeguard” tariffs on solar cells and modules issued under Section 201 of the Trade Act of 1974; and tariffs on cells, modules, and other components, issued under Section 301 of the Trade Act of 1974 in response to violations of trade agreements or actions burdening U.S. commerce. State and local policies and regulations have encouraged greater solar PV deployment in their jurisdictions. Examples include financial incentives (e.g., tax credits, rebates), renewable portfolio standards, and net metering policies. These developments in solar industry conditions and policies have affected U.S. manufacturing capacity, solar PV installations, component imports, and workforce needs. Solar PV manufacturing has five main stages: silicon/polysilicon, ingots, wafers, cells, and modules. In 2024, U.S. silicon/polysilicon manufacturing capacity increased to 34.5 gigawatts (GW), and module capacity increased to 33.9 GW—both substantial increases over the average capacities of the previous 10 years. U.S. manufacturers have announced planned capacity expansions of 8.0 GW of silicon/polysilicon, 8.3 GW of ingots, 19.3 GW of wafers, 42.0 GW of cells, and 41.5 GW of modules. The United States installed 137.2 GW of solar PV electricity generation capacity between 2015 and 2024, with 68.4% of that capacity in utility-scale installations (1 megawatt or larger), 22.7% in residential installations, and 8.9% in commercial and industrial installations. The U.S. Energy Information Administration anticipates that utility-scale installations will continue to supply the majority of new solar PV capacity in future years. Domestic manufacturing capacity has not been able to supply all the U.S. demand for solar PV components, so the United States has had to import components. The quantities of solar PV components imported at each manufacturing stage have varied over the years—with modules being the largest import category overall (by capacity), increasing from 9.9 GW in 2015 to 56.5 GW in 2023. Six nations have been the largest sources of solar PV modules, supplying 91.7% of capacity. The six nations are (with their total fraction of import capacity since 2015) Vietnam (32.2%), Malaysia (23.0%), Thailand (18.1%), Cambodia (7.1%), South Korea (6.5%), and India (4.8%). China, which dominates worldwide manufacturing of these components, was the country of origin for 1.2% of U.S. imports since 2015. Congress could consider conducting oversight of federal energy laws or federal energy tax credits to determine if they are having the intended impact. Congress could revise or repeal those laws or credits, as has been proposed in bills in the 118th Congress. Congress could review and revise federal programmatic funding supporting deployment of solar PV or promoting other goals such as grid resilience. Congress could provide policy guidance on trade issues and evaluate whether current trade policies are achieving their desired effects, including protecting U.S. interests, promoting U.S. solar PV manufacturing, or supporting solar PV deployment. Congress could conduct oversight of federal solar PV workforce initiatives or revise tax credits that potentially impact workforce issues, including issues related to the transition to greater RE deployment.