OCI to build $265 mn solar cell plant in Texas, expects $80 mn tax credit

South Korean solar cell company OCI Holdings Co. said on Thursday it will build a solar cell manufacturing plant in Texas through its US subsidiary Mission Solar Energy LLC.

The $265 million facility to be built on Mission Solar’s land will have the capacity to produce 2 gigawatts (GW) of solar cells annually.

The plant will commence operations in the first half of next year, initially producing 1 GW, with an additional 1 GW capacity to be added in the latter half.

OCI will be eligible for tax breaks under the Advanced Manufacturing Production Credit (AMPC) program as part of the US Inflation Reduction Act (IRA), which offers  $0.04 per watt produced in the country.

Projects using a substantial proportion of US-made components may also qualify for an additional 10% investment tax credit (ITC), according to OCI.

The Korean company expects to receive at least $80 million in US tax credits. 

By leveraging existing infrastructure at the Mission Solar Energy site, OCI also expects to minimize capital expenditures and reduce construction time by over a year compared to industry peers.

OCI EXPANDS NON-CHINA SUPPLY CHAIN BY BUILDING MORE US PLANTS

“With the establishment of this solar cell plant in the US, we are solidifying a non-China solar cell supply chain, enhancing market competitiveness in response to geopolitical uncertainties and trade policies,” an OCI official said.

OCI Holdings has positioned itself as a key global solar cell sector player.

Its Malaysian subsidiary, OCI TerraSus, formerly OCI M, already produces polysilicon, a critical material in solar panel production.

“This latest project marks the beginning of our efforts to strengthen our solar value chain in the US, further supporting the country’s clean energy goals,” said Lee Woo-hyun, OCI Holdings chairman and chief executive.

Last December, OCI Holdings said it signed a deal with US power supplier CPS Energy to jointly build a 120-megawatt solar cell plant and related battery energy storage system (BESS) with 480 MWh storage capacity in Texas.

Last month, OCI Energy Co., a US subsidiary of OCI Holdings, agreed with Israel’s Arava Power to jointly build a large-scale solar cell power plant in Texas under the SunRoper Project.

Based in Texas, OCI Energy has steadily invested in the US solar cell segment to bolster its presence in the North American BESS market.

Since 2011, OCI Energy has been operating 5.2 GW solar and ESS projects in the US.

Write to In-Soo Nam at isnam@hankyung.com

This article was edited by Jennifer Nicholson-Breen.