Yaskawa Solectria’s inverter manufacturing operations in Illinois.
Though the photo voltaic trade remains to be awaiting remaining guidelines on IRA manufacturing incentives, inverter firms are working forward to anticipate what the Dept. of the Treasury would require in the long run. For some inverter-makers, this contains transferring manufacturing operations stateside, whereas others already working right here take into account increasing their services to fulfill new demand.
In August, Siemens introduced a contract manufacturing partnership with Sanmina to make utility-scale photo voltaic string inverters in Wisconsin. The producer will produce Blueplanet inverters on the new web site, a product Seimens acquired from KACO in 2019.
As a multinational firm, Siemens pays minimal U.S. taxes and thus couldn’t absolutely seize the IRA’s 45X manufacturing tax credit score by opening its personal U.S. plant, in response to Rudy Wodrich, director of PV enterprise at Siemens USA. As a substitute, Siemens opted for contract manufacturing with Sanmina, with an settlement to separate the tax credit.
Microinverter producer Enphase is now producing IQ8 inverters with three U.S. contract producers as nicely — in South Carolina, Texas and Wisconsin. In contrast to Siemens, Enphase captures 100% of the IRA manufacturing credit by means of agreements with its manufacturing companions.
“Partnership phrases with contract manufacturing companions are negotiated with many elements in thoughts, with tax credit being one. However the advantages are shared with the companions,” mentioned Andy Newbold, senior director of company communications for Enphase.
Enphase expects to have the capability to supply 18 million microinverters per 12 months with these companions, for a complete of about 7 GW.
Along with receiving manufacturing tax credit, Siemens and different manufacturers have been motivated to begin U.S. manufacturing operations due to buyer demand — many community-solar and small-utility-scale builders that purchase Siemens inverters at the moment are searching for the IRA’s home content material bonus credit score.
In 2024, a photo voltaic mission can obtain this 10% bonus if 100% of the structural metal and iron are manufactured in the USA and 40% of all manufactured merchandise used within the mission are American-made. Inverters may play an important position in reaching that metric.
“Some are capable of do it by having sourced the fitting module that may get them to the 40 or 45% threshold instantly. Others who didn’t transfer quick sufficient at the moment are scrambling to determine, ‘OK, how do I get to that threshold with different elements?’” Wodrich mentioned. “The inverter, or inverter station, as it might be, could be a part of that blend to assist them get to the content material threshold on their facet.”
Yaskawa Solectria Photo voltaic
One other string inverter producer with current U.S. manufacturing, Yaskawa Solectria Photo voltaic, is anticipating this IRA momentum to result in an enormous increase in gross sales too. Up to now, normal supervisor Mark Goodreau mentioned Yaskawa’s “Made in America” promoting level was not at all times sufficient to beat out lower-priced Chinese language inverter rivals.
“What we discovered is that even having that designation didn’t actually compel our prospects to purchase from us, versus a Chinese language firm, I feel as a result of the [desire for American-made products] wasn’t actually a tough requirement,” Goodreau mentioned.
Its important manufacturing line of XGI 1500 inverters in Buffalo Grove, Illinois, can broaden to 2 GW per 12 months with further shifts and take a look at gear. Past that, Yaskawa must add an extra line.
Spanish utility-scale photo voltaic + storage inverter producer Energy Electronics can be bringing operations to the USA, with plans to open its personal manufacturing facility in Houston. Energy Electronics expects to start shipments of HEM and PCSM inverters in mid-2025, beginning with a 5-GW capability and ultimately ramping as much as 20 GW.
Home content material make-up
Merely assembling merchandise in the USA doesn’t essentially imply they are going to rely towards the home content material necessities — the Treasury Dept. will take into account the origin of a product’s subcomponents too. Solely elements made in America or people who bear a “substantial transformation” in the course of the manufacturing course of earlier than remaining meeting are relevant.
Siemens is conscious the U.S. content material necessities may nonetheless change in future bulletins from Treasury, however the firm feels safe in its manufacturing plans.
“That doesn’t concern us significantly, as a result of what we are literally attempting to do as we cultivate this product is to seek out mechanisms and means by which we will localize a few of the provide of elements which might be going into the product anyway,” Wodrich mentioned.
To anticipate any further necessities in addition to reduce some sometimes cumbersome provide chain points, Siemens is working to supply as many elements as attainable from the USA. Switching suppliers for sheet metallic, nuts, bolts, copper busbars and cable harnesses is comparatively easy, however issues grow to be extra sophisticated if Siemens adjustments any main elements associated to {the electrical} circuit of the product, which may set off a retest and recertification by a nationally acknowledged testing laboratory (NRTL) to make sure inverter security to the UL 1741 customary — which takes each money and time.
“We must construct the samples, ship them to Europe, have them examined to the UL requirements and certify the brand new elements within the provide chain that we’ve modified,” Wodrich mentioned.
So Siemens is beginning by discovering U.S. companions for these smaller, easier elements, and likewise “value-added processing” for different elements. Which means taking a gaggle of elements from one other nation and processing them domestically in a approach that considerably transforms them.
“I may have 5 elements which might be made in Europe, three elements which might be made within the U.S; I make a sub-assembly out of them during which I do some welding, some forming, some soldering, some portray, after which I can name that sub-assembly U.S. content material,” Wodrich mentioned.
EPC Energy’s manufacturing facility in Poway, California.
Utility-scale photo voltaic + storage inverter producer EPC Energy additionally feels assured within the share of U.S. elements in its merchandise, however remains to be working to regionally supply much more elements.
“Our purpose is to maximise that as a lot as attainable,” mentioned Adam Kabulski, VP of gross sales and advertising at EPC Energy.
EPC Energy has at all times made inverters in the USA, first at a facility in Poway, California, and now at a second plant that opened in Greenville, South Carolina, in late 2022. Present manufacturing capability between each factories is 6 GW yearly however will double to 12 GW by 2027.
The corporate is very centered on incorporating extra U.S. elements in its forthcoming 500-kW inverter for photo voltaic + storage functions.
“The brand new M inverter can be extra vertically built-in, with extra manufacturing processes carried out by EPC Energy at our services, vs. earlier inverters,” Kabulski mentioned. “This can improve the home content material portion of the invoice of supplies.”
Capability agreements
Siemens is aiming for a March 2024 manufacturing begin for U.S. string inverters out of Wisconsin, with full ramp-up by Could. The corporate is asking prospects to make reservations now for the restricted stock.
“We needed to make it possible for our key prospects had a chance to order that capability. It nonetheless is a little bit of a vendor’s market within the inverter house. There are extra tasks than there may be capability,” Wodrich mentioned.
Yaskawa Solectria Photo voltaic
Capability agreements are additionally a brand new actuality for Yaskawa Solectria. The corporate had a couple of long-term provide agreements up to now, however now it’s engaged on quite a few new long-term agreements with firms involved in its XGI 1500 inverter line, which the corporate mentioned has between 50 to 60% U.S. content material.
“We count on to be supply-constrained as we ramp up our capability over the following couple of years, in order that’s the aim of those provide agreements — in order that we now have understanding of the demand for a specific buyer,” Goodreau mentioned.
EPC Energy additionally makes use of provide agreements with prospects, however at all times retains some inventory unclaimed so the corporate can reply to adjustments available in the market.
“It’s a steadiness. We need to have strategic prospects; we need to have certainty of who we’re working with, people who worth what we carry. However we don’t need to be 100% MSAs (grasp provide agreements) that don’t permit us to reply to new developments,” Kabulski mentioned.
Whether or not producers have been producing inverters in the USA for years or they’re simply setting out now, the IRA is incentivizing home operations and rising buyer demand for American-made merchandise.
