Solar Panels Made In USA vs. China: Past, Present, and Future

Key Takeaways

• The U.S. aims for 45% of electricity from solar by 2050 to achieve carbon-free goals.
• China dominates global solar panel production, exporting 114 GW in early 2023.
• U.S. solar manufacturing is growing, fueled by policy and demand, yet relies on imports.
• Quality considerations between U.S. and Chinese solar panels involve sustainability and manufacturing practices.
• Reshoring U.S. solar manufacturing reduces environmental impact and enhances global energy security.

If you notice the number of solar installations increasing around your neighborhood and city, you are not alone. The world is focusing on renewable energy including solar modules, wind turbines, hydroelectric, and other emerging technologies for producing cleaner electricity.

Valve+Meter Performance Marketing partners with businesses in the solar industry. There is little doubt that the United States and other countries are committed to solar energy as well as wind, geothermal, and other clean energy.

President Biden has championed clean energy. The Biden administration rejoined the Paris Agreement with the intention to reduce net greenhouse gas emissions by 50% or more by 2030. The Solar Futures Study estimates the U.S. will need to produce about 45% of total electricity, roughly 1,570 GW, from solar to achieve 100% carbon pollution-free electricity by 2050.

After the passage of the Inflation Reduction Act (IRA), U.S. solar panel manufacturing has increased. More than 240 GW of manufacturing capacity has been announced across the solar supply chain, representing more than 22,000 potential jobs and more than $12 billion in announced investments across 72 new facilities or expansions.

There are now federal tax credits as well as state and city incentives for clean energy investments by individuals. To achieve the 80-90% of utility solar energy outlined by The Solar Futures Study, the Bureau of Land Management (BLM) has already approved 47 clean energy projects and permitted 11,236 megawatts of wind, solar and geothermal energy on public lands.

The present challenge is no longer the demand for solar panels, but rather, the need for stronger supply chains.

China’s dominance in solar power generation is indisputable. In 2022, China produced some 418 terawatt hours of solar. The United States ranked second at 208.4 terawatt hours. Other countries generating more than 25 terawatt hours include:

• Japan
• Germany
• India
• Australia
• South Korea
• Spain
• Italy
• Vietnam

When considering solar panel manufacturing, China accounted for nearly 78% of all panels.

In the first half of 2023, Chinese exports increased by 34%, with 114 GW shipped worldwide, compared to 85 GW in 2022. With nearly 8 out of every 10 solar panels made in China, most nations rely heavily on Chinese solar cells to power the future.

Solar panel manufacturing does occur outside of China, and domestic manufacturers are emerging in the United States.

According to Statista, there is a steep drop-off compared to China. Vietnam produced 6.4% of all panels in 2022, and Malaysia ranked third at 2.8%. That same year, the United States tied with India accounting for 1.9% of all solar panels manufactured. South Korea, Thailand, and many other nations manufacture photovoltaic modules.

Despite manufacturing 1.9% of worldwide solar panels in 2022, the United States has seen significant growth. Public policy and consumer demand have prompted new manufacturing across the nation. For example, in May of 2023, Invenergy announced a 5 GW/year facility will be built in Ohio.

The Solar Manufacturing Map now features 137 facilities across the country. American-made solar panels are often celebrated for their quality and innovation. Shipping of US solar panels has increased, but the vast majority of solar projects still rely on global imports.

The choice between American and Chinese solar panels is more than a simple product selection for consumers and businesses. It involves considering a complex array of factors, including manufacturing practices, sustainability, and the long-term implications for the global energy landscape.

In 2021, a U.S. Commerce Department ban on imports from some of the manufacturers of monocrystalline silicon and polysilicon that are used in solar panel production highlighted challenges within the industry. Supply chain disruptions, sourcing raw materials, tariffs, and other key questions lie ahead for both solar installation companies and end users of residential, commercial, and utility solar.

Globally, the USA and China are both recognized as leading producers. Both American-made solar panels and Chinese panels perform well over time.

Both nations are invested in the future of solar panels. According to Wood MacKenzie, China invested more than $130 billion in the solar industry in 2023. China will continue to dominate global polysilicon, silicon wafers, solar cells, and module capacity.

The Inflation Reduction Act marks a significant milestone for the American solar industry. It introduces tariffs and incentives aimed at bolstering domestic manufacturing. For example, there is an additional 10% incentive for projects that use domestic content.

Most panels for U.S. projects will continue to be imported. The United States imported 25.1 GWdc of PV modules in the first half of 2023, well over double the imports from the same period in 2022. The scale of demand across the country has outpaced domestic solar panel manufacturing.

What Are The Benefits of American-Made Solar Panels?

The future of American-made solar panels is poised for exciting advancements in the United States, China, and across the blog. Technological innovations, such as the development of more efficient solar cells and the integration of solar energy into smart grid systems, are on the horizon.

Reshoring solar manufacturing could be highly beneficial to the environment. A Cornell University study found, “Domestic c-Si PV panel manufacturing leads to a 23% reduction in climate change impact and a 4% decline in energy use from panel production compared to outsourced manufacturing.” (Nature)

Global energy security will not be determined by one solar panel manufacturing facility. The United States is focusing on cutting-edge research and sustainable manufacturing practices, while China continues to expand its production capacity and improve the quality of its solar panels. These developments are expected to drive market dynamics, leading to more accessible and efficient solar energy solutions worldwide.

The world is pivoting toward renewable energy. Solar companies and end users are at a critical juncture in the global energy transition. With China’s current dominance in production and the United States’ burgeoning growth fueled by policy support and innovation, the dynamic interplay between these two powerhouses underscores a collective move toward sustainability.

While there are innumerable challenges to how the world will scale clean energy, technological advancements continue to shape the industry.

The focus remains on enhancing efficiency, reducing environmental impact, and fostering a competitive, yet collaborative, global solar market. This narrative not only captures the essence of the current state but also paints a hopeful picture of a future where solar energy is a cornerstone of clean, accessible, and sustainable power worldwide.