Bill Gates Invests in First US Factory To Make Solar Panel Silicon Wafers

The US is a huge market and with concern about China's erratic supply chain performance growing, investment in US manufacturing is becoming economically advantageous. JL  

Phred Dvorak reports in the Wall Street Journal:

A startup backed by investors including Bill Gates is racing to build what could be the first silicon wafer factory for solar panels in the U.S. Silicon wafers are a key piece of the solar supply chain, and China controls 97% of it. The startup plans to build a plant by 2025 that can produce enough material for 10 gigawatts of solar panels a year, 80% of the large-scale solar projects installed last year. There are currently no factories to make wafers for solar panels in the U.S. The market for U.S.-made solar wafers is large, especially as demand for renewable energy accelerates.

A startup backed by investors including Bill Gates is racing to build what could be the first silicon wafer factory for solar panels in the U.S., the latest example of the influence of recent legislation offering tax credits for green-energy projects.

Silicon wafers are a key piece of the solar supply chain, and China controls 97% of it. There are currently no factories to make wafers for solar panels in the U.S., and the Energy Department has said building them should be a priority, since they could encourage faster development of other parts of the solar manufacturing industry as well.

The wafer startup, Massachusetts-based CubicPV Inc., plans to build a plant by 2025 that can produce enough material for 10 gigawatts of solar panels a year—sufficient to supply roughly 80% of the large-scale solar projects installed last year—at a cost of around $1 billion, said Frank van Mierlo, the company’s CEO.

 

That is a tall order for a closely held company that has historically focused on the development of new solar technologies and has raised a total of around $200 million since its predecessor, 1366 Technologies, was founded in 2008. CubicPV was formed last year when 1366 merged with a unit of Texas-based Hunt Energy.

But solar wafer manufacturers will be supported by clean-energy legislation passed in August, which offers tax credits that Mr. van Mierlo estimates at around 5 cents per watt produced, or $500 million a year for a factory the size CubicPV is planning. That is enough to make CubicPV’s wafers competitive with the lowest-cost commercial manufacturers now, he said.

CubicPV is backed by investors including Bill Gates’s Breakthrough Energy Ventures and First Solar Inc., the U.S.’s biggest solar panel maker. It has hired executives with manufacturing experience, has contracted with an engineering company and is talking with potential buyers interested in purchasing its wafers, said Mr. van Mierlo. If all goes well, the company will decide on the site for its plant next month and start construction in the middle of next year, he said.

With virtually all the world’s wafer-production capacity currently in China, “everybody starting in the U.S. today would essentially be a startup,” he said.

CubicPV’s biggest challenge is getting the factory up and running smoothly, said Mr. van Mierlo, since the company hasn’t handled wafer manufacturing at such a large scale before. CubicPV and its backers also have work to do to get the financing together, said Carmichael Roberts, head of Breakthrough Energy’s investment committee and the fund’s principal decision maker on CubicPV. Breakthrough Energy is helping secure funding and expertise for the factory, he said.

“There’s been risk in every last one of our enterprises,” said Mr. Roberts. “That’s what makes this job so important—to help along the way.”

The market for U.S.-made solar wafers is potentially large, especially as demand for renewable energy accelerates under aggressive targets from the Biden administration. Almost all the world’s solar wafers are made in China. But since 2014, China has imposed high duties on solar-grade silicon made in the U.S., effectively closing off that part of the supply chain for them.

Most of the world’s solar panels are made from silicon, which is formed into ingots and sliced into thin wafers that can be chemically treated, cut into squares called cells and put into a frame for the final product. That ingot- and wafer-making piece takes a lot of energy, making it one of the costliest parts of the solar manufacturing process.

CubicPV had long pursued new wafer-making technology that combines those two steps into one process, but it hadn’t yet rolled it out commercially. To reduce the risk for the U.S. factory, CubicPV will use conventional ingot and wafer technology, said Mr. van Mierlo.

Manufacturers of solar cells are hungry for U.S. wafers, especially since U.S. solar developers can earn more tax credits if they use panels made with domestic materials. The U.S. may also levy hefty tariffs on solar cells and panels made with Chinese wafers by Southeast Asian manufacturers, who currently supply most of America’s panels, according to analysts. The Commerce Department issued a preliminary determination earlier this month that some Chinese solar-cell and panel manufacturers who used Chinese wafers had circumvented U.S. tariffs.