"2.6x Growth in 5 Years" Korean Industry Quickens Pace Amid US Solar Power Boom

Hanwha Solutions and OCI Actively Consider Construction and Expansion of Local Factories in the US

As the U.S. solar market begins to flourish, the domestic solar industry is actively advancing into the American market.

According to industry sources on the 20th, Hanwha Solutions Q CELLS division and OCI are actively considering building and expanding factories in the U.S. Hanwha Solutions plans to invest approximately 2.4 trillion KRW to increase its current U.S. solar panel production capacity of 1.7GW by more than five times.

The Hanwha Q CELLS factory in Georgia, which began operations in the first half of 2019, currently produces about 1.7GW of modules annually. After July next year, this is expected to increase to over 3.1GW. Additionally, they are scouting locations for a new 9GW-class factory, with Texas and Georgia among the candidate sites. Hanwha Solutions is also securing the solar value chain. They acquired shares in U.S.-based REC Silicon, a polysilicon manufacturer that is a key raw material for solar panels, becoming the largest shareholder.

OCI is currently promoting module and solar power generation projects centered in Texas, a U.S. state with abundant sunlight. Although OCI’s polysilicon production plants are only located in Korea and Malaysia, they entered the local U.S. solar market by acquiring a solar power plant construction company in 2011. With the Inflation Reduction Act (IRA) maturing local investment conditions, the establishment of a U.S. factory is also approaching.

Prime Minister Han Duck-soo personally visited the Hanwha Q CELLS solar module factory in Georgia, U.S., promising to "prepare various support policies to help the renewable energy industry grow."

The U.S. solar market is creating a favorable environment for Korean companies due to government policies excluding Chinese firms. The U.S. offers tax credits of 4 cents per watt for cells and 7 cents per watt for modules to companies with local manufacturing facilities. If the factory, scheduled for completion in the first half of next year, operates at full capacity, Hanwha Solutions could receive tax benefits worth $220 million (approximately 306.5 billion KRW) annually.

Since 2012, the U.S. has imposed additional tariffs and quotas on Chinese solar products. Starting this year, imports of products using components manufactured in the Xinjiang region have been comprehensively banned due to forced labor concerns. Xinjiang supplied 45% of the world’s polysilicon (a raw material for solar modules) as of 2020. As a result, the share of Chinese solar products in U.S. imports has significantly decreased, replaced by Korean and Southeast Asian products.

According to the Solar Energy Industries Association and Wood Mackenzie, U.S. solar power capacity is expected to reach 336GW by 2027. This explosive growth is more than 2.6 times the current capacity of 129GW. Michael Davis, senior analyst at Wood Mackenzie, said, "The most important development for U.S. solar is the long-term extension of the investment tax credit (ITC) at 30%," adding, "The Inflation Reduction Act has provided the solar industry with the most long-term certainty. The U.S. solar industry is expected to continue thriving for the next decade."

The benefits of the U.S. solar market boom are reflected in performance. According to FnGuide, Hanwha Solutions, which produces solar cells and modules, posted a consensus for the third quarter with sales of 3.3974 trillion KRW and operating profit of 267.8 billion KRW. Compared to the third quarter of last year, sales increased by 32% and operating profit by about 50%. OCI also recorded sales of 1.2776 trillion KRW and operating profit of 271.4 billion KRW in the third quarter, growing 44% and 39% respectively compared to the same period last year.

This content was produced with the assistance of AI translation services.