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South Korean solar manufacturer OCI Holdings is rapidly increasing US production despite President Donald Trump’s pledge to cut clean energy subsidies and what he calls “once in a lifetime” exploiting electricity demand from data centers.
OCI, one of the world’s largest solar developers, plans to invest $1.2 billion by 2027 to increase the annual cell production capacity of its Texas plant to 10GW.
Increased energy requirements from US data centers will drive demand for solar power, allowing South Korean manufacturers to fill the gap. In particular, OCI Chairman and Co-Chief Executive Officer Woohyun Lee said, as previously dominant Chinese groups have been hit by tariffs.
“Many big data centers are being built amid the AI boom,” Lee told the Financial Times. “We see a big growth opportunity for the US given a tough energy supply there. There is no other way to surge in energy demand without the sun.”
However, Republican lawmakers are opposed to clean energy, and the U.S. House of Representatives has passed a tax bill that hampers the industry and ends renewable energy subsidies.
Lee said he is confident that the bill will be watered down when it passes the Senate “as it will destroy the US energy supply significantly.”
However, his company would have to reconsider some of its expansion plans if Congress passes the bill in its current form, he said, saying the 30% tax credit for commercial projects will be gradually reduced and eliminated by 2031.
OCI is one of the few substantial solar manufacturers operating in the US that survived the wave of bankruptcy in 2010 after overproduction of Chinese panels dragged prices, recorded lows and made many Western operations unprofitable.
The company said it could still benefit from restrictions on subsidies on House Bill’s bill for projects that include “material support” from “banned foreign companies.”
The Korean group has a polysilicon factory in Malaysia, which plans to make wafers in Southeast Asia and ship to the US for cell production.
Aided by inexpensive panels and subsidies, solar has become the fastest growing new source of electricity generation in the United States. A record 50gW solar capacity was installed last year, including 84% of the new capacity added to the grid, according to consulting firms Wood Mackenzie and the Solar Energy Industries Association.
However, according to OCI, US solar cell production is far behind panel production, leaving the company openings behind.
Lee said data-center-driven energy demand, heavy tariffs on Chinese imports and generous subsidies from Joe Biden’s Inflation Reduction Act have allowed non-Chinese producers, such as OCI, to compete better with US Chinese rivals.
China still produces 85% of the world’s solar cells and 79% of polysilicon, a key material within the cell. According to Wood Mackenzie, panels made in China remain significantly cheaper at 10 cents per watt.
Washington cracked down on imports of solar parts from China and Chinese companies. Biden has doubled US tariffs on China’s solar products by 50%, and Trump threatened to raise the tax by another 10%. Polysilicon and wafers from other countries are exempt from Trump’s so-called mutual tariffs.
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Lee said the industry needs more detailed guidelines for concern foreign entities and at least three-year grace periods and at least three-year grace periods given its advantage in panel and wafer manufacturing.
“Uncertainty has increased significantly along with the bill, but the U.S. energy supply market will continue to get very hot over the next decade,” he said.
However, Jana Frisico, head of solar supply chain research at Wood Mackenzie, said OCI’s plan to expand US plant capacity to 10GW in just two years was “overly ambitious.” She was hoping for a policy change to weaken US solar demand.
“The capacity for solar cell construction and operation in the US has proven to be quite complicated,” she said. “We have very limited expertise and experience in building solar capacity operating outside of China, and there is a huge difference between building manufacturing facilities and being able to produce qualified products.”
