Korean firms step up capex in U.S. solar power market

Hanwha Qcells Co., a leading solar module provider in the U.S. that’s operating a 1.7 gigawatt solar module plant in Dalton, Georgia, has a 3.2 trillion won ($2.6 billion) investment plan. [Image source: Hanwha Solutions]

Korean photovoltaic materials companies are increasing their investments in the rapidly growing U.S. solar power market.

Hanwha Qcells Co., a leading solar module provider in the U.S. that’s operating a 1.7 gigawatt solar module plant in Dalton, Georgia, has a 3.2 trillion won ($2.6 billion) investment plan. It is working to expand its current capacity at Dalton factory to 5.1GW and add a 3.3GW plant in nearby Cartersville. The company aims to reach 8.4 GW in combined output by the end of 2025.

OCI, another Korean solar energy material company, is also active in the U.S. Last year, the company announced a plan to increase its annual production capacity to 1GW from 0.21GW under a $40 million project.

U.S. companies are also increasing their investments. First Solar Inc., a U.S. solar module producer, announced a $1.2 billion investment plan in August. First Solar, the only U.S. company among the world‘s top 10 solar energy solution providers, plans to build a plant with an annual capacity of 3.5GW in the southeast of the country with the goal of starting operations in 2025. The company aims to increase its annual module capacity to more than 10GW by 2025.

The large-scale investment plans are driven by tax incentives such as investment tax credits (ITCs) and advanced manufacturing production credits (AMPCs) stipulated in the Inflation Reduction Act (IRA). The two incentives require tax reduction for investment in building eco-friendly factories in the U.S. and for production of green products.

According to Wood Mackenzie, a consulting firm that specializes in the energy sector, on Wednesday, the U.S. solar power market is expected to grow at an average annual rate of 19 percent to 75GW in 2031 from 16GW in 2022. Considering that 1GW represents the power generation capacity of one nuclear power plant, this means that solar power facilities equivalent to 75 nuclear power reactors will be created in the U.S. every year by 2031.