By Patrick Regan, president, Solar Crossroads
The climate provisions of the Inflation Reduction Act open a window on what is possible. Inside that window is a model for rethinking and changing the way solar modules are manufactured in America.
Crossroads Solar shows that you can build a solar module production facility from scratch, in the US, in the 2020s and have a workforce made up of men and women who traditionally struggle to find good jobs. All Crossroads employees are felons reintegrating into society.
Crossroads is a manufacturing facility that produces fully certified (UL/IEC 61730 & 61215 and CEC) solar modules in the range of 10 to 12 MWh per year. Our panels are sold regionally to the installation community and nationally through Krannich Solar, and are used in homes, farms and commercial buildings throughout the Midwest. We are, currently, selling every module we make and have a sales backorder.
The uniqueness of Crossroads is not only that we are a US-made module manufacturer starting from the beginning of 2021, or that we have a workforce composed only of second-time citizens, but in the potential for our model in the production of the revolutionary solar industry in the country.
The contemporary model consists almost exclusively of gigawatt-sized highly automated production facilities, often foreign-owned subsidiaries of billion-dollar companies that employ a labor force that is highly skilled, highly educated and often executive-level. But Crossroads shows it doesn’t have to be that way; that we don’t have to organize solar manufacturing around highly automated, highly corporate structures.
This would require 25 Crossroads-sized facilities scaled to 40 MWh of annual production each to equal the output of a gigawatt-sized factory. At first blush, and maybe to the local MBA graduate, it seems bad. But consider a 40-MWh facility located on tribal lands and employing people from communities that have traditionally struggled to find meaningful and well-paying jobs, or in a former community of coal mining where jobs are lost due to the need to wean ourselves from. a coal trust. A facility like Crossroads scaled to produce in the 40-MWh range will provide jobs and skills for those working in our economic engine. Instead of a front office with engineers and accountants, presidents and vice presidents, we could have 25 men and women working on the panels that make up the floor, which is relatively small in the executive suite. This is what the Crossroads model shows as an alternative path to successful solar panel manufacturing.
So imagine those 25 smaller production facilities scattered throughout Native lands, former coal mining communities, and inner cities, each producing panels for the growing solar industry. Crossroads Solar brings together men and women who have served from years to decades in prison, often with no skills or, in some cases, knowledge of computers or cell phones. We trained them to produce first quality panels, and to hand over the experiment we call Crossroads. Customers who purchase Crossroads panels are thrilled to be able to offer a true American-made product, and their clients are equally thrilled to be able to support American-made panels AND the social mission that underpins the Crossroads project.
Crossroads is a for-profit company. Margins are tight, pay structure is flat and motivation is high. This model can be taken all over the country.
An initial concern might be the 25 individual panel manufacturers competing with each other, but I don’t think that’s the right focus. Most of Crossroads’ market is regional, maybe even local. Yes, Krannich sells our panels nationally, but our regional business has grown. Smartly dispersed throughout the country, these 25 facilities will be cooperative, not competitive. One in Virginia, one in West Virginia, one in Kentucky, for example. With the increase in demand for solar power resulting from recent climate legislation, each of these facilities will find enough local markets to avoid one another.
In addition, 25 independent production facilities are able to collaborate on the purchasing ledger. Crossroads is struggling not to figure out how to be competitive on a smaller scale, but to try to figure out how to navigate the supply chain at this scale in a world where suppliers are privileged. in the large market of small. If purchasing power could be pooled — in effect, a purchasing cooperative — these smaller utilities would not face the price pressures that many think would make them less competitive. Buying cooperatively, selling independently and hiring and training locally is a recipe for success that even some of the gigawatt producers can’t navigate. For example, LG closed its doors to solar manufacturing because it could not find a way to be competitive in this tight market. Scale probably works against it.
I call it a distributed solar production model, and I’ve talked to people from Alaska to Louisiana about developing a production facility in their local community. What Crossroads brings to the table is a knowledge base of how to start from scratch, an understanding of production processes and efficiency, and under the right conditions, Crossroads can also offer a shortened path through in the certification process. Combined with economies of scale in the purchase of raw materials, the distributed model will provide for more access to solar modules by local installers who often find it difficult to buy from large producers. If you are forced to buy container quantities to ensure competitive pricing from large manufacturers, small installers are faced with the choice of being less competitive in their market or tying up their cash and restricting flow. of money. Small production like Crossroads allows us to sell by the pallet or by the truckload because the size makes us agile. A distributed production approach can increase access to a smaller installer community and therefore increase access to individuals trying to find a way to go solar while they take advantage of incentives. in solar.
Scale is important. Here at Crossroads, our initial project showed that we were too small. But the climate provisions of the IRA help provide the resources for small groups to begin the development of a scaled solar production in their community. Even a 30% manufacturing credit or a $0.07/watt output credit would reduce the risk and make the private partnerships needed to make a distributed model work much easier. And investments by state and local governments that see the value of targeted work around solar production can also help encourage creative financing by private interests. These can be well-paying jobs with benefits that require teachable skills, and revitalize a local workforce.
It is difficult to overstate the value of the climate provisions of the IRA in providing an opportunity to rethink how we consider the efficiency of solar production in America. It will take coordination, vision and some community involvement, but there is a model on the table that will provide for climate relief and workforce development on a scale that could revolutionize US solar module production.
Patrick Regan is a former professor of political science at the University of Notre Dame and Binghamton University. In 2019, he resigned his position at Notre Dame to co-start Crossroads Solar. Today, he is a full-time manufacturer of solar panels, and in the process of creating a model to change the way we make panels in the US and the way we think about workforce development.