Hanwha Q CELLS, MS ink largest solar panel supply deal in U.S.

[Courtesy of Hanwha]

Hanwha Solution Corp.’s Hanwha Q CELLS inked a groundbreaking solar power agreement with Microsoft Corp., in South Korea’s largest-ever solar energy contract with the United States. Leveraging the U.S. Inflation Reduction Act (IRA) that supports the solar industry, Hanwha Q CELLS not only benefits from tax credits for solar module production but also expands its contract acquisition.

Hanwha Q CELLS said that it has signed a deal with MS to supply a total of 12 gigawatts (GW) of solar panels through 2032 on Monday (local time). This is an increase in size from the 2.5 GW solar panel supply agreement signed between the companies in January 2023.

This module supply and engineering, procurement, and construction (EPC) contract is one of the largest solar panel supply agreements in the United States. The 12GW capacity has the potential to generate electricity for about 1.8 million households in the country, equating to 60 percent of the newly installed solar power capacity nationwide in 2022.

With its large-scale U.S. solar facility that was recently constructed, Hanwha Q CELLS secures a stable supply source via this contract. The company invested a total of $2.5 billion to build the Dalton facility in Georgia, boasting an annual solar module production capacity of 5.1GW. The Cartersville facility in Georgia, scheduled for completion in 2024, has production capabilities of 3.3GW each for ingots, wafers, cells, and modules.

With this contract, both Hanwha Q CELLS and Microsoft can maximize their benefits from IRA tax credits. Hanwha Q CELLS is eligible for the Advanced Manufacturing Production Credit (AMPC) benefits under IRA by producing solar cells and modules in the U.S. Renewable energy developers that sign power purchase agreements (PPA) with Microsoft can benefit from a 10 percent investment tax credit (ITC) under IRA’s local content rule (LCR) in addition to the existing 30 percent basic ITC if they use domestically produced solar panels from Hanwha Q CELLS.

As a renewable energy purchaser, Microsoft may not directly benefit from IRA through Hanwha Q CELLS solar panels, the power purchaser may benefit from a reduction in the cost of procuring electricity, as it could potentially lower the unit cost.

Hanwha Solutions stocks gained on Wednesday following the news of the contract. As of 9:05 a.m. on Wednesday, Hanwha Solutions stocks traded at 38,500 won ($29.16), or a 4.05 percent increase from the previous trading day.