Expanding the Photovoltaic Supply Chain in the United States: Opportunities and Challenges

This report considers U.S. infrastructure availability to meet demand for industries upstream of PV manufacturing. Our analysis considers both crystalline-silicon (c-Si) and thin-film PV, but focuses on c-Si. U.S. polysilicon production in 2017 was roughly equivalent to the total needed for 2017 U.S. PV demand, however, there were no U.S. producers of silicon wafers for PV applications in 2017, so we assume c-Si cell production relied on imported wafers. About 60% of the 2017 U.S. market for c-Si cells and 92% of modules (including thin-film) were imported. However, from 2017 to 2019, plans for new U.S. capacity were announced:1.6 GW of c-Si cells, 6.2 GW of c-Si modules, and 1.2 GW of thin-film modules. This would increase U.S. c-Si cell capacity tenfold and increase U.S. module (c-Si and thin-film) capacity threefold compared to the start of 2017. This could significantly impact U.S. supply chains for input materials. Therefore, we analyze a selection of the most expensive PV system components excluding c-Si cells: steel racking, aluminum frames and racking, inverters, flat glass, encapsulants, and backsheets. In 2017, the U.S. relied primarily on domestic steel, though U.S. production was below 80% capacity utilization. Since U.S. PV installations in 2017 represented less than 1% of total U.S. steel consumption, growth in PV installations could have modest benefits for local steel production without encountering supply constraints.Domestic primary aluminum production supplied 28% of total U.S. aluminum demand in 2017, though capacity was below 50% utilization. Since U.S. PV installations in 2017 represented less than 2% of total U.S. aluminum consumption, growth in PV installations or module assembly could occupy idle aluminum capacity if domestic aluminum became cost-competitive, without encountering supply constraints. In 2017, the U.S. relied primarily on domestic inverter production for all applications, where PV represents 15% of the market. However, the PV sector relied primarily on imported inverters though cybersecurity concerns have emerged regarding foreign-produced power electronics. If these concerns persist, it could stimulate higher domestic production. The U.S. flat glass market in 2017 relied primarily on domestic glass. In 2017, U.S. PV module production represented less than 1% of total U.S. flat glass consumption. Because glass is fragile, dense, and expensive to ship, growth in module production could represent growth for U.S. flat glass. We assume EVA to be the most common PV encapsulant. In 2017, the U.S. was a net exporter of EVA polymer, with a global advantage due to inexpensive shale-gas feedstocks. Less than 1% of U.S. EVA consumption was needed for domestic module production in 2017, but amount of EVA contained in 2017 U.S. PV installations represented 14% of total 2017 U.S. EVA consumption. Thus, growth of domestic module assembly could become a major driver of domestic EVA production. We analyze Tedlar as a primary material for PV backsheets due to its 30% market share and because the U.S. is the major global supplier of Tedlar. We estimate all Tedlar contained in U.S. PV installations was produced domestically. Given the uncertain longevity of alternative backsheet materials and emerging potential of transparent Tedlar, demand for Tedlar may increase further and motivate new capacity additions. Finally, we quantify the potential impact of PV demand growth for these components. We compare two scenarios where PV installations either double or increase tenfold. For each, we assume all demand uses domestic production or hold the percentage supplied by domestic production constant at 2017 levels. If all demand uses domestic production in the 2x scenario, U.S. PV demand would be a significant driver (less than 20%) in the markets for EVA and inverters. In the 10x scenario when all PV demand is met by domestic production, the flat glass, Tedlar, EVA, and inverter markets would be heavily affected.