Solar Billion-Dollar Sector to Unveil Proof-of-Existence in Tennessee
Tennessee Emerges as a Promising Hub for Solar Manufacturing
Tennessee is making strides in the solar industry, attracting significant investment despite having relatively low installed solar capacity. The state's appeal lies in its manufacturing-friendly policies, skilled workforce, existing solar manufacturing infrastructure, and cost advantages.
Strong Solar Manufacturing Presence
As of early 2025, Tennessee hosts 32 solar manufacturers and over 5,000 solar-related jobs, including manufacturing roles. This solid industrial base supports new manufacturing investments, with the state ranking between #36 to #50 in installed solar capacity.
Incentives and Cost Benefits
The state offers substantial tax incentives for solar equipment manufacturing and installation. For instance, a 100% sales tax exemption on solar electric systems and favorable property tax assessments (only 12.5% of installed cost is taxable) help lower project and manufacturing costs.
Strategic Location and Infrastructure
Tennessee’s industrial infrastructure, including expansions like Fronius USA’s facility in Nashville, supports solar-related manufacturing and supply chain activities, especially for key components like power inverters.
Solar-friendly Climate and Regional Demand Potential
Although Tennessee ranks low in overall solar installations, some regions have favorable solar radiation profiles and stable grid benefits encouraging commercial and new solar developments. These developments could indirectly support manufacturing growth.
Federal and Local Programs
Tennessee benefits from federal and TVA utility incentives, grants, and technical assistance programs, encouraging clean energy manufacturing growth despite slower residential and commercial solar adoption.
Notable Developments
SolarEdge and First Solar are among the post-OBBA highlights in the solar industry. T1 Energy, a solar cell manufacturer, is planning a 5-gigawatt addition to the US solar industry roster, to be located in Texas. Shoals Technologies Group, a global solar industry stakeholder, is headquartered in Tennessee and has an ongoing relationship with the US solar manufacturer First Solar.
Highland Materials plans to build a new $1 billion polysilicon manufacturing facility in Tennessee, while Solarcycle has welcomed Illuminate USA as their anchor customer for the first-of-its-kind American solar glass factory.
Looking Ahead
The Phipps Bend Advanced Manufacturing & Technology Campus in Tennessee, initially developed by the Tennessee Valley Authority for nuclear energy in the 1970s, is ideally suited for advanced manufacturers. Key stakeholders are planning ahead for a clean energy future, with Ford planning a full lineup of affordable electric passenger cars, pickup trucks, and vans, also deploying LFP batteries.
Despite a temporary setback due to a shift in federal energy policy, the US solar industry is showing resilience and strong demand, as tracked by IndexBox. The Solarcycle CEO, Suvi Sharma, believes the agreement between Solarcycle and Illuminate USA is a significant sign for the future of solar manufacturing in the US.
Ørsted, a leading Danish energy firm, is continuing with the construction of the 924-megawatt Sunrise Wind project off the New York coast, despite the dismantling of the federal offshore wind lease program.
In summary, Tennessee’s attractiveness derives from manufacturing-friendly policies, a skilled solar industry workforce, existing solar manufacturing infrastructure, and cost advantages, rather than current solar installation volumes. This combination makes it a competitive site for solar manufacturing firms planning long-term investments.
- The Tennessee Valley Authority (TVA) is considering repurposing the Phipps Bend Advanced Manufacturing & Technology Campus for advanced clean energy manufacturing, catering to affordable electric vehicles and LFP batteries.
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- The agreement between Solarcycle and Illuminate USA on the first US solar glass factory, headquartered in Tennessee, directly contributes to making the US a leader in clean energy manufacturing, as part of the global transition towards renewable sources and sustainable living.
- With Ørsted continuing the construction of their Sunrise Wind project, despite setbacks in the federal offshore wind lease program, it highlights the industry's resilience and the potential of Tennessee as a competitive site for solar manufacturing, even in the face of policy changes.
