Hanwha Solutions, the South Korean energy and petrochemical company, is considering an investment of nearly $2 billion to expand the production capacity of solar panels and modules in the United States in anticipation of an increase in the residential and commercial use of solar energy through generous tax credits under the new Inflation Reduction Act.

According to foreign media and industry sources, Hanwha Q Cells, a maker of photovoltaic solar cells under Hanwha Solutions, is considering several locations, including Georgia, Texas and South Carolina, for a new production base. Q Cells currently operates a solar module factory in Dalton, Georgia with a capacity of 1.7 gigawatts (GW). In May, it pledged to invest $171 million to increase its capacity to 3.1 GW.

In documents that Hanwha Q Cells filed with the Texas Comptroller’s Office seeking tax incentives, the producer envisions 530,000㎡ manufacturing space with an annual capacity of 9 GW for construction completion by the first half of 2024 after the start of work in the first half of 2023. .

The company said it was negotiating tax terms with several state governments and had not yet decided on the scale of investment, production capacity or location.

Hanwha Q Cells is a dominant player in residential and commercial solar modules in the United States. It stands to benefit from the IRA because it covers the solar PV industries end-to-end, including polysilicon, ingots, wafers, cells and modules, according to Industry. With the application of the IRA, solar energy manufacturers will be eligible for corporate tax credits for their products made in the United States for a decade from 2023 to 2022. Whereas Hanwha can produce modules of 3 GW in 2023, it will enjoy a tax credit of 200 billion earned ($149.18 million) per year, more than the company’s operating profit of 190.5 billion in 2020.

Meanwhile, the company will reopen REC Silicon in the fourth quarter. The Norwegian maker’s U.S. poly plants in Washington state and Montanta have been shut down since 2019 due to China’s retaliatory polysilicon tariffs. Hanwha Solution invested $160 million to buy a 16.7% stake in REC earlier this year.

Shares of Hanwha Solutions rose 1.22% to 49,900 won in early trading Thursday.

By Park Yun-gu and Jenny Lee

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