A new venture backed by Indian solar panel maker Vikram Solar said Thursday it will invest up to $1.5 billion in the US solar energy supply chain, starting with a plant in Colorado next year.
The newly created company, VSK Energy LLC, aims to leverage India’s vast experience in solar energy production to build a clean energy sector that can compete with China.
The announcement is the latest from an outside manufacturer seeking to use incentives in President Joe Biden’s climate change law, the Inflation Reduction Act (IRA), to boost renewable energy production.
VSK is a joint venture between Kolkata-based Vikram and two New York-based partners – sustainability-focused private equity firm Phalanx Impact Partners and Das & Co, an investment and development firm with solar interests in both the US and India.
“It is great for us to bring an Indian company to the table here,” said Sriram Das, Managing Director of Das & Co and Chairman of the Joint Venture. “I’ve seen some Indian companies in manufacturing and they’ve done very well, and Vikram is the best of them all.”
The company will begin manufacturing modules in Brighton, Colorado, next year, and plans to open a second facility in an unnamed southern state in 2025 to produce cells, wafers and ingots, the building blocks of solar panels.
The $250 million facility in Colorado will create more than 900 jobs and will initially be capable of producing 2 gigawatts of units per year, with plans to double that amount.
Colorado Gov. Jared Polis called the announcement a “huge step” for his state, which the plant was able to attract thanks to its well-trained workforce and central location near major US solar markets. The state is also providing VSK with up to $9.1 million in job creation tax credits.
“We are pleased as a country to be an important productive center for the renewable energy economy,” Polis said in an interview.
VSK will invest up to $1.25 billion in its second plant, which is expected to create more than 1,500 jobs.
Ganesh Chaudhary, Chairman of Vikram Solar, said the investment decision was largely based on US policies that encourage clean energy production.
“We are taking this step forward because of all the positive policy initiatives by the administration and the Biden administration to promote renewable energy,” he said in an interview.
Under an IRA, solar projects built with panels containing homemade cells can receive a lucrative tax credit of 10% of the project cost. Most of the solar power in US projects today is imported from Asia.
Biden wants to decarbonize the US power grid by 2035, an ambitious goal aimed at combating climate change and creating jobs.
Like the United States, India has subsidized domestic solar energy production and imposed import taxes to reduce dependence on Chinese imports. India is on track to become self-sufficient by 2026, according to the Institute for Energy Economics and Financial Analysis. (Reporting by Nicola Groom in Los Angeles; Editing by Matthew Lewis)
