Advocates for renewables in the U.S. see an abundant promise with solar power, which will push the country closer to achieving a greener economy. The U.S. is expected to add 62.8 GW of new utility-scale electric-generating capacity this year.
The Biden-Harris administration in April 2024 announced $7 billion in federal grants for residential solar projects to more than 900,000 households. The “Solar for All” program, backed by the Environmental Protection Agency, is expected to save Americans $350 million annually on electric bills, and reduce 30 million metric tons of carbon dioxide equivalent emissions.
COMMENTARY
Silicon metal, a high purity processed form of silicon, plays a pivotal role in the U.S. solar energy program. As the U.S. accelerates its transition to renewable energy sources to combat climate change and achieve energy independence, the production and supply of silicon metal will become increasingly critical. However, the industry faces significant challenges, particularly from international competition, notably indirect competition from China, which dominates global silicon metal production.
This article is included in “Coming Together for Clean Energy,” POWER’s publication that is aligned with RE+, the largest renewable energy trade show in North America. RE+ is happening Sept. 9-12, 2024, in Anaheim, California. To continue the conversation around clean energy, plan to attend POWER’s EP Week event in Orlando, Florida, Oct. 9-11, 2024.
Challenges and Threats from China
The government’s interest in solar, along with energy-conscious households and private investors, should drive increasing demand for the inputs of the solar supply chain. For that, a U.S.-based production supply chain is needed for sustainable domestic production.
China currently dominates all elements of the solar supply chain, and imports of solar materials from China undercut the U.S. market. This is happening at many points in the supply chain, including the silicon metal upon which the solar industry is based. Demand for silicon metal will grow quickly as the new decade unfolds, and unless more U.S. production capacity is added, a dangerous dependence upon imports will grow.
The reality is that few can withstand China’s dominance in global metals and minerals commodity markets. China currently owns 75% of the global silicon metal market and will increase its production capacity another 66% by 2027, even though global demand will only grow 37% in that period. This excess production will come to the detriment of domestic production in other countries worldwide, leading to even more global dependence upon China.
Several factors contribute to China’s competitive advantage, including its use of forced labor, lack of environmental standards, and outsized Chinese government subsidies and strategic investments—all of which pose a significant risk to domestic supply of perhaps the most critical solar input.
The U.S. faces several risks due to this dependency. A potential supply disruption from China, for example, whether due to trade disputes, political tensions, or other factors, could severely impact the availability and cost of silicon metal in the U.S. This, in turn, could stall the growth of the solar industry and impede the nation’s progress toward its renewable energy goals.
Strategic Responses and Recommendations
Several strategic actions are necessary to address these challenges. First, the U.S. should invest in expanding and modernizing its domestic silicon metal production capabilities. This includes capacity expansion to meet more of the domestic demand, and incentivizing research and development in more efficient production technologies.
Second, the U.S. government should strengthen measures requiring traceability of key ingredients in the solar value chain, including the quartz from which silicon metal is sourced. Additionally, strengthening trade policies and securing trade agreements that ensure stable access to essential materials can help mitigate risks associated with international supply chains.
Mineral partnerships or “friendshoring” can help in the race for critical minerals. Canada and Australia even issued a joint statement to declare their shared priorities to advance their electric vehicle and clean tech sectors via the development of global critical minerals. Instead of battling China alone, the two nations can better fortify their minerals supply chain as a unified entity.
According to a Net Zero Industrial Policy Lab at Johns Hopkins University, partnerships among democratic states may produce enough minerals to reach a global warming limit of 1.5C. Future memorandums of understanding will form bonds of cooperation as opposed to barriers. This strength-in-numbers approach further signifies that multinational collaboration is necessary to protect the planet. And the “foundation” of a cooperative Western effort is strengthened by each region’s policy developments toward critical materials.
Furthermore, fostering public-private partnerships can drive innovation and support the development of new technologies. Investing in recycling and reusing silicon from old solar panels can also reduce demand for newly produced silicon metal, contributing to a more sustainable industry.
In conclusion, silicon metal production is a critical component of the U.S. solar energy sector, and its importance is magnified by the nation’s push toward a cleaner and more sustainable energy future. However, the significant threat posed by China’s dominant production capacity highlights the need for strategic investments and policies to ensure a stable and competitive domestic supply. By addressing these challenges proactively, the U.S. can safeguard its solar energy goals and maintain its position as a leader in renewable energy innovation.
—Bill Hightower is VP of U.S. Corporate Affairs for Ferroglobe.
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- Source: https://www.powermag.com/the-critical-role-of-silicon-metal-production-in-the-u-s-solar-energy-sector/