Swiss solar cell and module manufacturer Meyer Burger has halted an expansion of a German factory and will instead build a new plant in the US, saying it is in line to collect $1.4bn in subsidies under President Joe Biden's Inflation Reduction Act (IRA).
The company announced on Monday that it will build a 2GW solar cell manufacturing facility in Colorado Springs. If production begins, as planned, by late next year, Meyer Burger said it will collect $1.4bn in IRA benefits by 2032.
The City of Colorado Springs and the State of Colorado are also supporting the plant with a further $90m, including in tax credits and discounted utilities bills. The US Department of Energy has also promised a more than $300m loan to help get its operations off the ground.
The Swiss company had originally been planning to ramp up production in Germany and the US at the same time. This was to help cater to rising demand amid a desire by the US and the EU to become less dependent on Chinese manufacturers.
The IRA, which was passed by the Biden administration last year and includes a potential $369bn in renewables subsidies, has changed these calculations, even though the EU unveiled its own ‘Green Deal Industrial Plan’ in February to stop the IRA luring European manufacturing to the US.
Meyer Burger had already warned the German government last month it was considering halting a planned 2GW expansion of its Thalheim solar cell plant in the country in favour of building a US plant to take advantage of IRA benefits.
Now, its planned Colorado plant will exclusively supply Meyer Burger's solar module production in Arizona.
By expanding its strategy to "Made in USA" solar cells, Meyer Burger said it is “responding to market requirements” resulting from new regulations in the US – including an additional 10 percent bonus investment tax credit for US solar projects.
“Meyer Burger strongly believes that domestically manufactured solar cells will bring additional value to our customers, both in relation to using best-in-class high performance solar products ‘Made in USA’ and in terms of qualifying for additional tax credits,” said the company’s CEO Gunter Erfurt.
He added that Meyer Burger is also working on additional multi-gigawatt offtake agreements in the US with new customers. "We are already exploring opportunities to add further solar cell and module production capacity in the country,” he stated.
The company has not entirely abandoned its European expansion plans, however. It says that a multi-gigawatt expansion in Thalheim “is planned at a later stage” as part of its successful application under the EU Innovation Fund.
The company said it would also participate in the German government´s “recent call of interest for a renaissance of the PV industry.”