On Monday the Biden Administration launched a new initiative aimed at tackling skyrocketing energy prices and sustainable development while simultaneously boosting domestic manufacturing.
Using powers granted to the President during the Korean War to direct U.S. manufacturing, the Biden Administration has tasked the Department of Energy to accelerate the domestic production of solar panels, transformers and power transmission technologies, heat pumps, insulation, and electrolyzes and fuel cells.
These technologies are at the core of planned efforts to increase renewable energy supplies, reduce energy demand, and enable the development of infrastructure that will allow the use of clean-burning hydrogen as a fuel source for industries across the country.
“President Biden has invoked the Defense Production Act so that the U.S. can take ownership of its clean energy independence,” said U.S. Secretary of Energy Jennifer M. Granholm in a statement yesterday. “For too long the nation’s clean energy supply chain has been over-reliant on foreign sources and adversarial nations. With the new DPA authority, DOE can help strengthen domestic solar, heat pump and grid manufacturing industries while fortifying America’s economic security and creating good-paying jobs, and lowering utility costs along the way.”
The Administration views reducing energy demand as a key way to move the country away from reliance on fossil fuels that drive up costs when supplies shrink. Renewable energy has the benefit of providing a reliable and more stable source of power.
Detractors need only look at the performance of renewable power during the most recent energy crunch in Texas to see the potential benefits of greater wind and solar deployments around the country.
“Reducing America’s dependence on gas and oil is critical to U.S. national security,” said Deputy Secretary of Defense Dr. Kathleen Hicks. “In conflict, fossil fuel supply lines are especially vulnerable. The actions President Biden announced today will help strengthen our supply chains and ensure that the United States is a leader in producing the energy technologies that are essential to our future success. They will also help accelerate DoD’s transition toward clean energy technologies that can help strengthen military capability while creating good jobs for American workers.”
While many of these industries are very established, few American companies have been able to claim a top spot in the global supply chain.
There's only one solar manufacturer from the U.S. which makes the list of top companies in the industry -- FirstSolar. Most of the leading solar power equipment producers are Chinese.
What's really needed to boost manufacturing of solar panels is to reinvigorate existing factories and build new ones quickly to reach an industry target of 50 gigawatts of solar panel production by 2030.
That requires investments in mining, processing, purifying, and fabrication of solar cells. Then there's the additional investments in the hardware needed to install solar on rooftops and in utility-scale arrays.
In all, the push should create thousands of jobs.
Existing mines in West Virginia and Ohio can supply the raw materials and Alabama could provide another source of material. Workers are already dusting off the cobwebs at polysilicon (the raw material for solar cells) factories in Michigan, Washington and Tennessee. And module makers in Georgia, Ohio, Washington and Texas already exist. According to the Solar Energy Industry Association, new factories could be spun up in 18-24 months.
New technology companies are also looking to bring solar power production back to American shores, but the Biden package boosts opportunities across different investment categories.
Transmission and distribution technologies to bring renewable energy to US homes and to upgrade the aging electricity grid are also targeted by the new Defense Production Act policy.
This is an area where new component manufacturers like TS Conductor can shine. The company is backed by the billionaire-funded climate tech investor Breakthrough Energy Ventures and the multinational power provider, National Grid.
Taken together, the White House expects global demand for these products to skyrocket by 400% to 600%, according to the government's estimates.
As the White House noted in its statement, unless the U.S. expands new manufacturing, processing, and installation capacity the nation risks being tied to clean energy imports and the whims of the nations that supply them.