3 Questions with Tony Clifford

My name is Frank Andorka, and I am a Content Lead for Akhia. I’ve long had a passion for the solar manufacturing industry and recently launched a LinkedIn newsletter to cover it under the Akhia flag. As part of that newsletter, I sit down with some of the solar industry’s leading voices and get their thoughts on where the solar manufacturing industry is and where it is going.

Our first interviewee is Tony Clifford, who has more than 25 years of experience in the solar industry, including 10 years as CEO of Standard Solar. He is now semi-retired, but he does some consulting and sits on a couple of boards of directors. He can be reached via LinkedIn. I asked Tony to give me his thoughts on how solar manufacturing has fared in the United States over the years and where he thinks it’s going next.

When the industry began, the majority of solar manufacturing was done in the United States. Over the last two decades, however, solar manufacturing has shifted to China and is now dominated by Chinese manufacturers. Can you give us a little of the history of how and why that happened?

TC: The modern solar industry began in 1972 when a Hungarian-born physicist, Dr. Joseph Lindmayer, and another Hungarian, Dr. Peter Varadi (a chemist), founded Solarex Corporation in Rockville, Maryland. As a freshly minted MBA, I joined Solarex as employee No. 11 in July 1975.  I was the first employee with an advanced degree in something other than physics or chemistry. There was no established terrestrial market for photovoltaics in the early 1970s, but reject space cells were used in modules to power radio-repeating and microwave stations on mountaintops and other locations well beyond roads and the utility grid. Obviously, these were tiny markets, and reject space cells were still rather expensive. I was hired when Solarex won a six-figure contract from the National Science Foundation and needed someone to manage that contract.

The Energy Research and Development Administration (ERDA), a precursor to the modern Department of Energy, was established in January 1975. After ERDA was up and organized, photovoltaics began to get some traction. Solarex was located about six miles outside the Washington beltway, so it was perfectly located to work with ERDA and to promote photovoltaics technology on Capitol Hill. Also, it was an easy ride for Hill staffers and the occasional Congressman or Senator to make a morning or afternoon visit. Of course, it was also easy for Dr. Lindmayer and I to go downtown to meetings at ERDA/DOE and to testify or lobby on Capitol Hill. I also did a lot of lobbying on my own in the mid- to late-1970s.

ERDA (after 1977 the Department of Energy) quickly became the primary source for research and development funding for solar research and for demonstration projects to show the potential of photovoltaic technology. Between 1970 and 1975, the cost of PV had dropped from upward of $500/Watt (space cells) to around $30/W. Around that time, ERDA set a goal to reach $0.50/Watt for solar modules by 1986. While the tiny commercial markets were growing, the primary market during that time was the U.S. government, specifically ERDA/DOE and the military. The primary vehicle for both research funding and module procurement was the Low-Cost Silicon Solar Array (LSSA) project which was managed for DOE by NASA’s Jet Propulsion Laboratory in Pasadena, California.

In 1979, I worked with an assistant to the president of Georgetown University to prepare a proposal for a 300kW solar array to be installed on its yet-to-be-constructed Intercultural Center. When I finished the proposal, we presented it to Father Healy, then president of Georgetown. He briefly looked at the proposal, and then he said to me something like, “Young man, this appears to be a well-written proposal. I’ll show it to my tennis partner after 6 o’clock mass on Sunday morning.” I immediately thought “Who is his tennis partner?”

Outside the office, his assistant told me his tennis partner was Tip O’Neill Jr., then Speaker of the House of Representatives. The Georgetown project appeared as a line item in the DOE budget for the following fiscal year. By the time the building was constructed, and the solar array installed, it was late 1983. At 300kW, it was the largest solar array in the United States. Sadly, it remained the largest PV system for far too long. When a few modules were removed and measured in 2010 (26 years later), the output was only down about 6% from their initial rated output.

By 1980, Solarex had several serious competitors, and the solar industry was growing rapidly and driving down costs continuously. Module prices had dropped from the $500/Watt of the early 1970s to around $5/Watt in 1980. The industry was on target to meet the 1986 goal of $0.50/Watt, which would compete with utility-generated power. Sadly, when President Reagan took office in 1981, he eliminated the LSSA Program and turned DOE development interest toward synfuels and other technologies favored by oil, gas and coal interests. He later famously had the solar hot water panels removed from the White House.

By 1980, the United States was, by far, the worldwide leader in solar research and development, and manufacturing. A 1980 Solar Energy Research Institute (SERI, now NREL) report listed 22 American companies as solar cell/module producers. However, very few of those firms survived the 1980s. Lack of government support stalled growth and technological advancement. It also led to substantially less investment in solar companies.  

From most reports, the solar manufacturing industry seems to be coming back. Would you assess the current state of play and the strength of our domestic solar manufacturing base and discuss what has helped reshore so much of it (state vs. federal incentives, for example)?

TC: I divide the solar manufacturing market into four segments: polysilicon, hardware, modules, and cells. Let’s address these individually.

Polysilicon. Silicon is the second most abundant element on earth. It is the predominant material in most microchips and almost all solar cells. Producing solar-grade silicon is a complicated industrial process. Production facilities look like and cost like oil refineries. A new one requires investment in the range of hundreds of millions.

According to an April 7, 2024, article in Energy Trend, China is the global leader in polysilicon production with more than 90% of the global polysilicon market. The United States and Canada have less than 5% of the total market. With a huge domestic solar cell market, favorable government-controlled electricity pricing and cheap labor, China has some distinct advantages in polysilicon production.

Fortunately, the United States does have four companies now producing polysilicon. Not surprisingly, these manufacturing facilities are in areas of the United States with less expensive electricity—Tennessee, Mississippi, the Pacific Northwest and northern Michigan. With proper government incentives, these plants and perhaps a few new ones could meet 100% of the United States’ current and future solar cell requirements. Mississippi Silicon, by far the newest polysilicon plant in the USA, cost more than $200 million to construct in 2017.

Solar Hardware. The manufacture of mounting systems, cabling and other hardware never really left the United States. Array Technologies has been in business for more than 30 years. While NEXTracker is only 11 years old, its founder, Dan Shugar, has been in tracking and mounting hardware since the 1990s. PanelClaw, the dominant, flat-roof racking manufacturer, was founded by CEO Costa Nicolaou in 2007. Shoals Technology, a worldwide supplier of wiring and other electrical balance of system products has been in the solar industry for 27 years. There are also numerous companies in specific niche markets that I’ve not mentioned.

These “balance of system” products are a small part of the overall cost of a PV system. Compared to polysilicon or cell and module production, these products are low tech. Most are expensive to transport over long international distances. Larger companies like NEXTracker and Array Technologies have established manufacturing plants in various countries around the world to service local markets.

I believe that most solar racking and other balance of PV system products will always be produced in the United States if the government maintains a reasonable policy environment for the PV industry.

Solar Modules. While module manufacturing never totally left the United States, it is certainly resurging in a big way. The continuing tariffs on Chinese imports and the growing overall U.S. market for PV are the primary reasons. The solar manufacturing incentives included in the Inflation Reduction Act provide manufacturing tax credits and other incentives that will attract additional companies to the industry.

Mission Solar is an American firm that sources most of its components from Asia. Two additional major international firms, Canadian Solar and Turkey’s Elin Energy, will soon open module assembly plants in the United States. Other firms have announced major expansion of their module production plans in the past two years. Clearly, solar module production in the United States is coming on strong.

Solar Cells. According to the International Energy Agency, only 2% of worldwide solar cell production in 2023 was in the United States. China produced 86%, and most of the rest was in southeast Asia or India. China is clearly the dominant producer of solar cells. As noted above, China also controls much of the worldwide production of polysilicon.

Like polysilicon, solar cell production is capital-intensive. A solar cell production facility is a minimum $100 million capital investment. The success of such investments in the United States is dependent on long-term government support of photovoltaics. At present that government support seems solid. Funding of a project by the DOE Loan Guarantee program, now led by Jigar Shah, should minimize the perceived investment risk in the eyes of potential investors.

I’m guardedly optimistic that solar cell manufacturing will take off in the United States.  As we are seeing in the solar module business, Chinese cell manufacturing likely needs to locate manufacturing facilities in the USA to remain competitive in the marketplace long-term.

As you look to the future, what do you see in the cards for the U.S. solar manufacturing market? What steps can our government take to ensure the growth continues and what could stand in its way?

TC: Under President Biden’s leadership, the federal government has taken some serious steps to provide an excellent framework for growth of the PV industry. Moreover, nearly 20 states now provide varying incentives to foster the growth of solar in their state. While the solar industry is now on a good trajectory, there is an overarching need for long-term consistency in federal and state programs. Also, there is much more that could/should be done including:

• Expansion of access to low-cost capital. At present the minimum amount to be guaranteed by the DOE Loan Guarantee Program is around $100 Million. There should be solar loan programs for smaller projects. They could be managed by DOE, the Small Business Administration, Agriculture, or another agency.
• Long-term extension of the investment tax credit, perhaps to 2050. If you think this is impossible, I’ll remind you that the oil depletion allowance has been in existence since 1916—that is 108 years.
• Increased tax incentives for purchase of American-made production equipment.
• Tax incentives for increased domestic production linked to production increases, increased employment or other reasonable targets.
• Low-cost loan programs to encourage school districts, community hospitals and other non-profits to install solar.
• An Executive Order requiring all federal agencies to use solar or other renewable technologies wherever feasible and require an annual report from all agencies on renewables use.
• Directions and funding to the FERC to accelerate needed improvements in electrical transmission nationwide.

Solar advocacy at the state level is quite challenging in that there are 50 states, plus the District of Columbia. That means solar energy firms and solar advocates must deal with 50 different legislatures, 50 different public service commissions (PUCs) and 50 different governors. Also, there are about 3,000 electric utilities in the United States. Most utilities are not that accepting of solar and have excellent relationships with the state PUC. Their lobbyists have good relationships with state legislators. I have advocated for PV in 10 states, successfully in nine of them. Three overarching things I’ve learned are the need for a unified solar industry approach, the need for grass roots support, and patience.

To be successful with proposed solar legislation, the solar industry must present a unified front to a legislature. Any disagreements between residential, commercial, and utility-scale segments must be resolved in advance. That doesn’t mean your industry segment will benefit from everything in any proposed solar legislation. However, if one solar lobbyist or solar advocate organization disagrees with a plan, that is often fatal to proposed legislation. It gives legislators the opportunity to say, “The industry is divided” and gives them the excuse to kick the can down the road to a future legislative session.

Grassroots support is key to getting solar legislation passed. Relying strictly on lobbyists prowling the state capitol is often a recipe for failure. Legislators typically have limited staff and limited time to deal with any proposed legislation. If they haven’t heard from multiple constituents in their legislative district, an issue goes way down on their priority list. Getting solar supporters to the state capitol is one way to get some “solar-only” time with a key legislator. A much more effective way is to get multiple pro-solar constituents from his or her district to lobby them back home in the district. Of course, this is challenging work as these pro-solar constituents must be identified and educated in advance about the proposed legislation.

I don’t think patience needs any explanation.