Highland Materials Set To Add 20K Tonnes Polysilicon Capacity In US

The IRA (Inflation Reduction Act) driven manufacturing bandwagon is still picking up pace in the US. The latest announcement comes from Polysilicon manufacturer Highland Materials, that has secured US$255.6 million in 48C tax credits to build a polysilicon plant in the US. The announcement comes even as global polysilicon prices, mirroring the rest of the solar supply chain, are barely off all time lows in prices. The manufacturing ‘boom’ of sorts has led to a higher than expected rise in power demand, in turn feeding into a stronger push for renewables as well.

Highland’s new facility is expected to have an initial annual capacity of 16,000 metric tons (MT) of solar silicon, to be increased to 20,000MT in four years, equivalent to about 10GW of solar cells. Highland Materials also claims that its manufacturing process leads to a 90% reduction in carbon emissions, in the energy intensive polysilicon manufacturing process. This would also be the first new commercial polysilicon plant to be built in the US since the passage of the Inflation Reduction Act (IRA) in August 2022. However, the location or the date for start of production have not been disclosed or finalised yet.

Most IRA backed projects face a sunset deadline of 2030, so will need to get off the ground by 2025 end latest to benefit from the incentives.

Even as fresh manufacturing units come up, protection for them might be enhanced soon, as seen by reports of the lifting of exemptions on Bifacial module imports recently.

The Qualifying Advanced Energy Project Tax Credit (48C) scheme has  set aside US$4 billion for tax credits, of which US$2.7 billion is earmarked for use in clean energy manufacturing projects. Over a 100 firms have been selected for benefits so far.

Established in 2009 under the American Recovery and Reinvestment Act, the 48C scheme received an additional US$10 billion under the IRA. The initiative provides an investment tax credit (ITC) associated with an investment in a manufacturing facility.

“We are excited about the Department of Energy’s sign of support for Highland and our technology,” said Richard Rast, president of Highland Materials. “By commercialising our silicon purification technology, we as an American company can continue to innovate on American soil with significantly less cost and carbon emissions than other manufacturers.”

According to the company, its solar grade polysilicon uses a proprietary technology that is more environmentally-friendly than current technologies, such as Siemens and Fluid Bed Reactor, all while delivering performance on par with these technologies.