A group of leading US renewable energy companies has pledged to buy up to 7 gigawatts of US-made solar panels per year in order to secure a robust domestic supply chain.

AES Corp, Clearway Energy Group, Cypress Creek Renewables and D E Shaw Renewable Investments have pledged an estimated US$6Bn for four years of domestically sourced solar panels starting in 2024. The process of receiving bids from potential suppliers will begin immediately in order to allow the build-out of domestic capacity roughly equal to around a quarter of current annual installations in the USA.

The pledged solar panel orders are aimed at incentivising an expansion of US solar panel production, building out a more robust domestic supply chain and reducing dependence on imports from China and Southeast Asia. US solar panel production will have to overcome significant cost advantages found in China and Southeast Asia production, which is unlikely without significant government support by way of incentives.

In related news, the supply of the critical raw materials required for US production of solar panels has just been hit by a ban on imports from China’s Xinjiang province on the grounds of forced labour concerns. The region is one of the world’s main sources of polysilicon, ingots, wafers and cells used in the assembly of most solar panels. As with many other critical material supply chains, security of supply can involve several processing and upstream contingencies – reducing one supply chain risk can simply shift the risk to another step of the supply chain.