Author: JULIAN SPECTOR         Published: 6/5/2023  Canary  Media

Large metal cylinders sit on train flatcars outside a large blue factory in an industrial yard

The remnants of the Weirton Steel facility put the finishing touches on steel now made elsewhere. 

WEIRTON, West Virginia — On a recent May day, some 235 people gathered from across the country in a vacant lot on the banks of the Ohio River. Behind the tent where they mingled under radiant blue skies, excavators crunched into the earth, gnawing at the remains of a demolished steel plant that had sat quiet since 2005.

This was the groundbreaking ceremony for Form Energy, a cleantech startup based in Berkeley, California and Somerville, Massachusetts, whose leaders chose this historic steel town in the far northern panhandle of West Virginia for their first commercial-scale factory. A century ago, townspeople here took iron ore shipped along the Ohio River and threw it in furnaces with West Virginia coal to forge steel. The molten slag made the night sky glow red.

Now Form Energy is building an 800,000-square-foot factory to manufacture iron-air batteries that can store energy for days on end, turning wind and solar power into reliable baseload energy sources, a potential breakthrough in the quest for a carbon-free grid.

If you’d have come here 3040 years ago, you wouldn’t have seen a vacant lot — everything was filled with manufacturing of some sort,” said Senator Joe Manchin, Democrat of West Virginia, in a speech to the crowd. ​Steel was being made at the rate nothing has ever seen.”

West Virginia mined the coal that made the steel that built the guns and ships for the American war effort in World War II, Manchin told the audience. But that legacy couldn’t preserve the steel mill — once the state’s largest employer and taxpayer — when deindustrialization kicked in and America shipped its manufacturing jobs overseas. In a lot adjacent to the field where the ceremony was held, train flatcars still carry shiny spools of steel made elsewhere; Weirton’s remaining steel operation just puts the finishing touches on those products.

We did everything the country asked us to do,” Manchin said. ​And I guarantee it: We felt like we were left behind.”

But now that great ebbing of American manufacturing is reversing, and new factories are springing up in Weirton and communities like it across the country, many of them building clean energy products that have never been made in America at this scale.

A crisis precipitated this sea change: The Covid pandemic stymied supply chains and issued a stark wake-up call for manufacturers and developers. Then last August, Manchin and his fellow Democrats passed the Inflation Reduction Act, allocating hundreds of billions of dollars for both manufacturing at home and deploying domestic products.

Startups like Form Energy are producing never-before-seen batteries to make renewable power available around the clock. Billion-dollar battery and electric vehicle factories have clustered in the Rust Belt states of Michigan, Indiana and Ohio, down through Kentucky into a new Southeastern Battery Belt spanning Tennessee, Georgia and the Carolinas. Major solar panel factories are popping up in Georgia, Alabama, Texas and, as of a few weeks ago, Oklahoma; companies are taking early steps to build more of the components here, too. A sputtering onshore-wind supply chain is finding a new lease on life, and a brand new offshore-wind manufacturing sector is gearing up.

The scale and speed of the shift has been stunning. Clean energy is no niche industry anymore; it’s become a pillar of the national economy. And now that climate-friendly technologies are bringing eye-popping job and investment packages, the states most resistant to climate policy have proven themselves the most enthusiastic adopters of the factories.

These political complexities hummed throughout Form’s groundbreaking ceremony, like the drone of the nearby excavators.

Energy Secretary Jennifer Granholm took to the stage to connect Weirton’s changing fortunes to President Biden’s climate and jobs policies: ​One of the things that we’ve got to be clear about,” she told the crowd, ​is that the revitalization in communities like Weirton and across the country is happening because of the Inflation Reduction Act.”

Senator Manchin emphasized that he supported the law for the sake of energy security after Russia’s invasion of Ukraine upended global energy markets. He also reminded the crowd that one-third of the law’s total allocation of $689 billion went to debt reduction — ​No one wants to talk about that!”

Clean energy is no niche industry anymore; it’s become a pillar of the national economy.

Mitch Carmichael, who leads West Virginia’s Department of Economic Development, hailed Form Factory 1 for its local benefits in his speech.

Jobs mean everything to a community,” said Carmichael, whose boss, Trump-aligned Republican Governor Jim Justice, is running for Manchin’s Senate seat in 2024. ​And this is the groundbreaking for the largest announcement that we’ve done in West Virginia in many, many, many years — 750 direct jobs, [from] which the economic impact will be thousands.”

As the speakers made clear, everyone gets something they want out of the clean energy factory ramp-up, which is why this grand national experiment just might work.

At the ceremony’s conclusion, Form’s co-founders stepped up to sign a steel beam that will form part of the new factory. But first, Senator Manchin had a song request.

Where’s our guitar player?” he asked.

A hometown crooner emerged, and Manchin and Granholm led the crowd in a rousing rendition of ​Take Me Home, Country Roads,” since 2014 one of West Virginia’s four official state songs, as the party inked the hunk of steel.

A group of men and one woman in business attire sing and clap under a tent at an outdoor groundbreaking ceremony
Energy Secretary Jennifer Granholm and West Virginia Senator Joe Manchin (D) lead the crowd in a chorus of “Take Me Home, Country Roads.” From left, West Virginia Secretary of Economic Development Mitch Carmichael and Form co-founder Mateo Jaramillo join in. (Julian Spector/Canary Media)

The did-that-just-happen level of bonhomie signaled a promising start to the new era of U.S. clean energy manufacturing. But after the groundbreaking, the heavy construction begins. An industry that grew up on the sidelines of the economy must step into its newfound leadership role.

If the U.S. regains its former manufacturing powerhouse status, it can speed its pace toward the decarbonization deadlines necessary to stave off the worst impacts of climate change. But the shift from familiar, import-based industry to a homegrown one with more domestic control is still a gamble. To succeed, this industrial project needs to go beyond superficial reshoring to fully realized supply chains employing people across the breadth of America.

D.C. beckons, clean energy responds 

The sudden turn to domestic clean energy has been enabled by a broader transformation in American notions governing trade and industry. After decades of offshoring jobs and industries in the name of corporate-friendly, least-cost-seeking neoliberal principles, trade leaders on the left and right have changed their minds, as recently chronicled by Politico trade correspondent Gavin Bade. Both parties say they want a more worker-centric trade regime that brings jobs and critical industries back home.

The clean energy industry has been rocked by these seismic shifts. In the mid-20th century, the U.S. dominated lithium mining; government-funded scientists invented solar panels and later made key strides on lithium-ion battery technology. But in the late ​80s and ​90s, policymakers pulled back from supporting those industries and let the all-knowing market carry those activities to wherever in the world they could be done cheapest and with the least environmental scrutiny.

Today, China handles nearly all of the upstream materials that end up in solar panels, which are the largest source of new U.S. power plant construction. China similarly dominates lithium refining and battery production, which are now essential to the future of both the automotive and utility industries.

But supply-chain disruptions during Covid threw clean energy projects way off their timelines; the pennies saved by buying cheap imports suddenly risked millions of dollars of penalties for breaking contracted deadlines. And Congress blocked products made in China under forced-labor conditions by the Uyghur minority, forcing solar companies to scramble to figure out whether or not their supply chains were tainted.

Everyone gets something they want out of the clean energy factory ramp-up, which is why this grand national experiment just might work.

Last August, Democrats passed the Inflation Reduction Act and instituted direct support for domestic manufacturing of clean energy supply chains, as well as tax credits for developers who install domestically sourced equipment at their clean power plants.

The industry responded like a lightning bolt. Solar panel factories are opening and expanding across the nation. Lithium-ion battery production is set to grow tenfold by 2027, according to data from Clean Energy Associates consultancy. Form broke ground in Weirton less than a year after the passage of the incentives.

We’ve seen, in the last six months, more investment in clean energy manufacturing than we have in the last 20 years,” said Scott Moskowitz, senior director of market strategy and public affairs for Qcells, which recently said it would spend another $2.5 billion to expand its solar manufacturing base in Georgia.

Speeding up the clean energy transition

The Biden administration is betting that the U.S. will decarbonize faster if it builds more of the necessary equipment at home. That’s the ultimate metric by which the return to domestic manufacturing should be judged, Granholm told me after the last chorus of ​Take Me Home, Country Roads.”

The big goal, right, is 100% clean electricity by 2035,” she said.

There’s risk in taking the familiar, if flawed, global supply chain that made clean energy the largest source of new power plant construction in the U.S., and substituting it with an American supply chain that’s still emerging.

But during the Covid years, renewables developers learned the hard way that the cheaper Asian imports came with unanticipated costs. China-based goods are now under increasing political scrutiny from both parties.

If we want to continue to deploy the amount of clean energy that is necessary to decarbonize the grid, then we also need to look at all the bottlenecks,” said MJ Shiao, vice president for supply chain and manufacturing at American Clean Power industry group.

Customers buying U.S.-made products, on the other hand, ​are never going to see a module detained at the port,” said David Reasenberg, VP of sales and business development at Heliene, one of the few North American solar manufacturers to survive the last decade.

Now, tax credits in the IRA address the higher costs of domestic production, putting local factories on a competitive footing for the U.S. market. Large renewables developers are asking for homegrown product — like when the U.S. Solar Buyer Consortium formed by AESClearway and others said last June it would collectively purchase 6 gigawatts of U.S.-made solar panels.

Washington no longer wants to rely on the homogenized global marketplace to hand us the tools for a clean energy economy. For instance, the batteries mass-produced in Asia can’t do the job of economically storing renewable power for long stretches without wind or solar. But the U.S. grid needs to make ​renewable energy as dispatchable as possible,” Granholm said. ​That’s what Form Energy…is all about.” By taking charge on manufacturing, the U.S. is expanding the climate solution toolkit.

Onshoring entire supply chains, not just products 

But the early wins in new solar and battery production mask tougher challenges ahead: actually closing the ever-widening gap between U.S. supply and demand, and sourcing all the raw materials that the new factories depend on.

The White House wants to see ​as much of this manufacturing in the United States as possible” and will even push toward exporting clean energy around the world, Granholm said.

That means doing the hard work of building out entire supply chains locally, because, as Manchin told me with dismay, ​We’ve allowed the building blocks of America to leave us, and we’ve got to bring it back.” (For the record, when in the same conversation, I referred to the IRA as a clean energy investment law, he interrupted me to say that it was primarily an energy security law.)

A secure, homegrown, ​soup-to-nuts” supply chain, per Granholm’s tabulation, would include: ​sustainable extraction,” processing critical minerals, battery assembly, electric vehicle manufacturing, solar panel fabrication (“including perovskites,” a next-generation technology), solar racks and tracker production, and making components for onshore and offshore wind farms.

So far, the U.S. has made swift progress on building clean energy products (downstream) while remaining largely dependent on foreign sources for the raw materials inside them (upstream).

When it comes to full self-sufficiency, ​We’re talking about running an ultramarathon when we’re still sitting on the couch,” said Shiao. ​The most important win right now is to take these [factory] announcements and make them reality.”

Gigawatts’ worth of new solar panel production lines have been announced since the IRA passed; that’s desperately needed because the U.S. only produces about one-third of the panels it installs in a year. Battery cell production is picking up. EV factories are proliferating.

By taking charge on manufacturing, the U.S. is expanding the climate solution toolkit.

But demand for all these products is skyrocketing as the energy transition advances, so rising to meet 2023 demand is not nearly enough. And critical earlier steps in the supply chain haven’t caught up.

Take, for example, one of the first new solar plants to come to the U.S.: South Korean company Qcells opened a factory in northern Georgia in 2019 that can crank out 1.7 gigawatts’ worth of solar modules annually. But the factory takes photovoltaic cells made overseas and turns them into finished products. That leaves the earlier manufacturing steps offshore: cell production, silicon wafers, and the polysilicon that wafers are made from.

Since the Inflation Reduction Act, though, Qcells committed to expanding its facility to 5.1 gigawatts of module production annually. It invested in REC Silicon to restart its idled polysilicon plant in Washington state by the end of the year, then signed a 10-year supply agreement for that material. Now Qcells is building a factory in Cartersville, Georgia to make ingots, wafers, cells and modules; it will deliver 3.3 gigawatts of fully onshore production.

It’s all part of this very comprehensive supply-chain push in which we are looking to ensure long-term reliability and availability of all the major pieces of the supply chain and do it here in the United States,” Moskowitz said.

Similar to solar, the U.S. is finally building meaningful lithium-ion battery cell production, much of it clustered in the Southeastern Battery Belt and in the historic Rust Belt states. But no new lithium mines have gotten permits, even though the U.S. once led the global lithium mining industry with hard-rock extraction from the Carolina Tin-Spodumene Belt west of Charlotte, North Carolina.

Progress has been better with expanding domestic refining of metals. Lithium giant Albemarle is adding a $1.3 billion operation in South Carolina to process lithium into battery precursors. A crop of battery recycling startups now recover good-as-new materials from used batteries.

The U.S. is still a long way from true self-sufficiency, then. But there’s logic to starting with the end products and building out the domestic supply chain from there, said Suzanne Swink, vice president of government relations at Kore Power, which is constructing a battery gigafactory outside of Phoenix.

Mines need a place to send their material to be processed; processors need offtakers for their product,” she said. ​Providing the upstream with a partner and customer will pull in that demand and help foster a robust U.S. supply chain.”

Filling jobs, sharing the benefits

The hundreds of new factories not only revitalize local communities, but also offer reasons to believe in a clean energy transition that may otherwise seem removed from people’s lives. The trick, though, will be actually preparing workers to fill the jobs all those new factories bring. That’s the top concern for every executive I spoke with who’s opening a U.S. factory. Granholm agreed: ​The big challenge is going to be workforce.”

Two female factory workers on an assembly line manuver the partially completed chassis of a vehicle
Two workers on the F-150 Lightning assembly line at a Ford factory in Dearborn, Michigan (Ford)

Representative Sean Casten (D-Illinois), whom I spoke with at the Midwest Solar Expo near Chicago in May, linked that challenge to other looming unsolved policy disputes.

We are creating more jobs than we’re creating workers in this country,” he said. Congress could address this through immigration reform, criminal-justice reform or better federal child-care benefits, he said, but added, with an air of understatement, that none of those ​feel very bipartisan right now.”

In the meantime, the jobs are going to the states and communities that pitch the best existing workforce or offer to train newcomers.

Counterintuitively, that’s often the places that don’t particularly like the Inflation Reduction Act, or even climate policy generally. In coal-producing West Virginia, for instance, Manchin’s approval numbers dipped after he went from blocking Biden’s agenda to passing the Inflation Reduction Act, per Morning Consult. But Republican state officials joined Form’s groundbreaking ceremony to celebrate the clean manufacturing advance.

West Virginia’s Republican Senator Shelley Moore Capito, who called the Inflation Reduction Act ​indefensible” prior to its passage, has worked to ensure road upgrades for trucks to smoothly bring supplies into the factory and ship finished goods out.

This pattern holds across the country. The growing Qcells complex sits in the district represented by MAGA conservative Republican Marjorie Taylor Green. Major EV investments are heading to Tennessee, Georgia, South Carolina. In the White House’s tally, billion-dollar factories are notably sparse or nonexistent in the bastions of progressive climate policy on the West Coast and Northeast.

This spread of clean manufacturing jobs in business-friendly states with relatively amenable permitting systems could have a knock-on effect of strengthening the political coalition in favor of the energy transition. That, in turn, makes it more likely the supporting policies of the IRA stay in place.

The President is the president for all Americans, and he wants red states to succeed in the same way he wants blue states to succeed — he wants America to succeed,” Granholm said. ​The factories are just being built. But it might cause a turn of opinion about the importance of clean energy and our clean energy future, especially as the incentives help to bring down the cost of clean energy.”

This reflects a political lesson that’s both obvious and often overlooked: The best way to win people over to a cause is to demonstrate how it materially improves their lives.