The Biden Administration on June 6 said it would authorize the use of the Defense Production Act and leverage federal procurement to boost domestic solar energy technology production.
With respect to procurement, Biden directed the development of two tools:
- Master Supply Agreements for domestically manufactured solar systems to increase the speed and efficiency with which domestic clean electricity providers can sell their products to the U.S. government; and
- So-called “Super Preferences” to apply domestic content standards for federal procurement of solar systems, including domestically manufactured solar photovoltaic components, consistent with the Buy American Act.
According to a White House fact sheet, these federal procurement measures can stimulate demand for up to a gigawatt of domestically produced solar modules in the near term, and up to 10 gigawatts over the next decade from U.S. government demand alone.
To further increase the impact of these actions, the Biden Administration will also partner with state and local governments and municipal utilities in these innovative arrangements, increasing the potential market impact over the next decade to as much as over 100 gigawatts.
Defense Production Act
President Biden also authorized the Department of Energy to use the Defense Production Act to rapidly expand American manufacturing of five technologies:
- Solar panel parts like photovoltaic modules and module components;
- Building insulation;
- Heat pumps;
- Equipment for making and using clean electricity-generated fuels, including electrolyzers, fuel cells, and related platinum group metals; and
- Critical power grid infrastructure like transformers
24-Month Bridge For Solar Imports
President Biden also used his powers to create a 24-month bridge for certain solar imports, the fact sheet noted.
Specifically, the President is temporarily facilitating U.S. solar deployers’ ability to source solar modules and cells from Cambodia, Malaysia, Thailand, and Vietnam by providing that those components can be imported free of certain duties for 24 months.
This will ensure the U.S. has access to a sufficient supply of solar modules to meet electricity generation needs while domestic manufacturing scales up, the White House said.
APPA Statement
The American Public Power Association (APPA) "appreciates the Biden Administration’s focus and action on supply chain issues, which threaten electric utilities’ ability to provide reliable and affordable power to U.S. homes, businesses, and critical facilities," said Joy Ditto, President and CEO of APPA.
"Electric utilities are currently experiencing shortages of distribution transformers, smart meters, conductor materials, skilled labor, and other necessities due to the economic impacts from the COVID-19 pandemic and other factors. And APPA has pointed out that without immediate action, delayed investments and expanding lead times for new equipment caused by a lack of materials and labor will continue to compound the problem—possibly for years to come. This is particularly concerning as we head into the summer months and storm season, which already threaten the reliability of electric service," she said.
"On behalf of our more than 49 million customers, APPA and its members look forward to working with the Administration, our government partners, and manufacturers to explore every option available to ramp up production and availability of critical grid components so that we can continue to power our communities," Ditto said.
