Section 45X Advanced Manufacturing Credit: 2023 Solar Factory Boom in America

2023 marked a turning point for U.S. solar manufacturing. Backed by the Section 45X Advanced Manufacturing Production Credit created under the Inflation Reduction Act, module and cell makers announced and completed a wave of American factory expansions not seen since the industry's earliest domestic manufacturing push. For distributors and installers, this buildout means a growing supply of domestic-content-eligible components — a critical input for capturing IRA bonus tax credits.

How the 45X Credit Works

Section 45X provides a per-unit production tax credit for eligible components manufactured in the United States and sold to unrelated parties, including solar cells, modules, wafers, polysilicon, torque tubes, structural fasteners, inverters, and battery components. On December 14, 2023, Treasury and the IRS issued proposed regulations (IR-2023-238) providing detailed rules for calculating the credit, defining eligible components, and setting recordkeeping requirements, according to the IRS newsroom. The guidance also introduced a "Related Person Election," allowing manufacturers to treat sales to related entities as sales to unrelated parties for credit-eligibility purposes.

Because 45X credits are stackable and uncapped relative to production volume, they gave manufacturers a strong incentive to build or expand U.S.-based capacity across the entire value chain — from polysilicon and wafers through cells and finished modules.

Qcells: The Largest Buildout in the Western Hemisphere

South Korea-based Qcells made the single largest domestic manufacturing commitment of the year. In January 2023, the company announced a $2.5 billion investment to expand its Dalton, Georgia factory and build a new fully integrated solar supply chain facility in Cartersville, Georgia, according to a Qcells North America press release. By October 18, 2023, Qcells completed the first phase — a 2 GW expansion of the Dalton plant, bringing its output to more than 5.1 GW and making it the largest solar manufacturing plant in the Western Hemisphere. Qcells described it as the first full solar panel factory expansion completed since the IRA's passage. Combined, the Dalton and planned Cartersville facilities were expected to reach 8.4 GW of annual capacity by 2024 — enough to supply panels for 1.3 million homes annually.

First Solar's Ohio and Alabama Expansion

First Solar, the largest U.S.-headquartered module manufacturer, continued executing on its multi-billion-dollar domestic expansion plan throughout 2023. The company brought a new Ohio factory online in the first half of 2023 and advanced construction of its $1.1 billion, 3.5 GWdc thin-film facility in Lawrence County, Alabama — its fourth U.S. plant, according to CNBC's reporting on the Alabama announcement and confirmed by Alabama's state economic development agency (ADECA), which awarded infrastructure grant funding in June 2023 to support the project. First Solar's CEO publicly credited the IRA as the pivotal factor behind the company's accelerated U.S. investment, which by 2023 had scaled its domestic manufacturing commitments toward a target of over 10 GWdc of annual nameplate capacity by 2025.

JinkoSolar's Florida Expansion

Chinese manufacturer JinkoSolar, which has operated a module assembly plant in Jacksonville, Florida since 2018, moved to significantly expand that facility in 2023. In April 2023, the company sought local incentives for a $52 million investment aimed at tripling production capacity at its Cecil Commerce Center plant and adding 250 jobs, according to the Jax Daily Record. The city's incentive package was later withdrawn following a federal search warrant executed at the facility in May 2023, but JinkoSolar proceeded with the expansion using its own capital, per subsequent Jax Daily Record reporting. By year-end, employment at the Jacksonville plant had grown from roughly 274 to about 550 workers.

Broader Manufacturing Momentum

Top-Five Manufacturers Building U.S. Capacity

Qcells, First Solar, and JinkoSolar were not alone. According to Solar Magazine's September 2023 industry roundup, four of the world's top five module manufacturers — Trina Solar, JA Solar, JinkoSolar, LONGi, and CSI Solar — had either established or were actively constructing U.S. manufacturing facilities by late 2023, driven directly by 45X economics and domestic content bonus eligibility.

Polysilicon and Upstream Production

The manufacturing boom extended upstream as well. Domestic polysilicon and wafer production drew new investment as manufacturers sought to qualify for the full domestic content stack, not just cell and module assembly. Analysts at Wood Mackenzie noted that as of 2021, roughly 85% of global photovoltaic cell production remained concentrated in China, underscoring how significant a shift full vertical integration in the U.S. would represent, according to Wood Mackenzie's 2023 Solar and Energy Storage Summit takeaways.

What This Means for Installers Sourcing Equipment

• Domestically manufactured modules and inverters are becoming more available, giving installers more options for meeting domestic content bonus thresholds on IRA-eligible projects.
• Expect a persistent price premium on domestic-content-eligible components relative to globally sourced modules, reflecting both tariff protection and 45X-driven demand.
• Stock a mix of import and domestic-content solar panels to serve both budget-focused and tax-credit-optimized customers.

PES Supply typically delivers in-stock panel and inverter orders in 7-10 business days, helping contractors plan around growing but still-tight domestic supply.

Sources

• IRS — Guidance for the Advanced Manufacturing Production Credit
• Qcells North America — Dalton Factory Expansion Completion
• Reuters/CNBC — First Solar Selects Alabama for New Factory
• ADECA — Governor Ivey Awards Grant for First Solar Project
• Jax Daily Record — JinkoSolar Seeks Incentive for Expansion
• Solar Magazine — Solar Manufacturing Giants Building U.S. Facilities
• Wood Mackenzie — Solar Energy Storage Summit 2023 Takeaways