At a recent Honyu employee event, the Communications Department invited our Production Director Eric to share his views on the prospect of establishing a manufacturing facility in the United States. The interview summary is as follows:
Q: Eric, recently many solar companies have been evaluating the possibility of setting up factories in the U.S. Can you share how this idea came about?
Eric:
We've been closely observing developments in the U.S. market, and there have been some notable changes in recent years. In 2024 alone, the U.S. added over 50GW of new solar capacity, marking a year-on-year growth of more than 20%, with more than 80% of that coming from utility-scale projects. This scale of expansion places higher demands on the local supply of solar modules.
At the same time, the Inflation Reduction Act (IRA) offers unprecedented support for domestic manufacturing. For example, solar projects using domestically produced components can qualify for a 30% base Investment Tax Credit (ITC), plus an additional 10% “domestic content” bonus. This translates into a very real cost advantage for developers. We've noticed that many developers now prefer “Made in America” products to qualify for the highest levels of tax incentives.
Q: Besides policy and market demand, are there other key factors to consider?
Eric:
One important factor is regulatory compliance and long-term strategic positioning. Recently, the Trump administration announced new reciprocal tariffs on a wide range of countries, with rates as high as 25%. However, shortly after implementation, the administration paused these tariffs for most countries—excluding China—for a 90-day review period. This kind of policy volatility increases operational uncertainty. Establishing a local factory can help multinational solar companies like us navigate such uncertainties more effectively and maintain a stable, compliant supply chain.
Meanwhile, as the second-largest solar market in the world, the U.S. is expected to maintain strong growth over the next 5–10 years. According to BloombergNEF, the U.S. will continue adding 45–50GW of solar capacity annually through 2030. Setting up local production helps us stay close to key customers, shorten delivery timelines, and build a stronger local brand presence.
Q: That sounds promising, but manufacturing in the U.S. is known to be expensive. How are you evaluating the cost side?
Eric:
You're absolutely right—cost is a major challenge. We've reviewed public data from NREL and the U.S. Department of Energy, and also had informal discussions with peers who have already built facilities in the U.S. Labor costs in the U.S. are roughly 3 to 4 times higher than in Southeast Asia. Combined with land, energy, safety, and environmental compliance expenses, the investment required to build and operate a 1GW production line in the U.S. could be 30%–50% higher than in Vietnam.
That said, there are relative advantages as well. For instance, some states offer flexible tax policies and lower industrial electricity prices—states like Georgia, Texas, and Ohio are particularly attractive. With the right site selection and by leveraging manufacturing tax credits under IRA Section 45X, we believe it's possible to bring the marginal cost of U.S.-made modules closer to imported products. We are currently running financial models to test these scenarios.
Q: For overseas companies, there are many approaches—such as wholly-owned factories, joint ventures, or acquiring existing facilities. Does Honyu have specific plans for U.S. manufacturing?
Eric:
It's part of our long-term strategic planning. We’re currently leaning toward a more flexible approach—such as partnering with local developers, EPC firms, or government-backed funds to co-invest in joint ventures. We're also evaluating the potential acquisition of existing lines as a way to quickly establish a local footprint. We've been particularly interested in case studies like Longi’s joint venture with Invenergy, and Jinko’s expansion in Florida supported by state-level incentives.
From a risk control perspective, our preferred path may be to start with a relatively “asset-light + order-linked” model in the first phase, then scale up gradually based on market response and evolving policies.
Q: Do you have any advice for other Southeast Asian solar companies considering manufacturing in the U.S.?
Eric:
I’d say the U.S. market presents great opportunities, but it’s not a place for “quick in, quick out” strategies. My advice would be:
First, carefully calculate the full lifecycle cost—including construction, logistics, labor, and certifications.
Second, evaluate the stability of policies and the strength of local support programs—some states offer millions in training subsidies or tax credits.
Third, don’t underestimate the importance of brand positioning and community engagement, which may be new to us in Southeast Asia, but are essential in the U.S.
At the end of the day, setting up a U.S. factory isn’t just about avoiding trade risk—it’s about creating long-term local value. That’s the foundation of our ongoing evaluation process.
