The Uyghur forced labor Prevention Act has not gone away, by the way, and they just added lithium to the list of priority sectors for enforcement.

So there is an elevated risk right now that batteries will be detained under UF LPA, and we didn't even talk about that, right?

So not only do you need to know what your supply chain is, so that you can know whether or not it is Fiat and whether or not you can claim the tax credits.

But you should probably be keeping an eye on your supply chain to make sure that you're not importing goods that could be detained by customs and may not be able to get out of detention.

Are you speeding the energy transition here at the Clean Power Hour, our host Tim Montague, bring you the best in solar, batteries and clean technologies every week.

Want to go deeper into decarbonization.

We do too.

We're here to help you understand and command the commercial, residential and utility, solar, wind and storage industries.

So let's get to it together.

We can speed the energy transition

today on the Clean Power Hour, the global supply of batteries and micro grid equipment.

I'm Tim Montague.

Check out all of our content at cleanpowerhour.com Give us a rating and a review on Apple or Spotify, and reach out to me on LinkedIn.

I love hearing from my listeners.

My guest today is Christian Roselund.

He is the senior policy analyst at clean energy associates, otherwise known as CEA.

Welcome back to the show.

Christian.

Thank you so much.

Tim, it's great to be here.

It's been

way too long.

You were the editor of PV magazine USA, I think the the first time you came on the show, and that was like four years ago.

Maybe so things are different now, but here we are.

As we were saying in the pre show, it's game on for battery storage.

The grid needs it.

It's good for customers.

It helps reduce power bills.

It provides resilience.

There's a huge value stack of batteries and micro grids that I'm not going to go into right now, but you have to, obviously be able to buy that stuff.

And it turns out that China makes the vast majority of that equipment.

I think 70% of the global supply of lithium iron battery cells are made in China.

And so every developer and asset owner is trying to figure their way around this.

There's this thing called the O triple B that came out in the summer of 2025 just to make the water a little more frothy and hard to swim through.

So Christian, tell us a little bit about yourself and what you do.

For CEA,

sure.

So I'm the Senior Policy Analyst here at clean energy associates.

I lead policy research and development in the market intelligence team.

I have one a colleague who joins me in that, del Rawlinson, and, yeah, with it cease market intelligence team.

We're really focused on the supply side.

So I would say we're the preeminent global firm looking at the supply side for solar and battery storage.

And you know, we're also lucky that we have this big network, you know, CA does a lot of things.

We're a Technical Services Advisory company that started out in QA many years ago.

And you know, we've had the market intelligence division, I want to say, for, I think, five years now, or six years.

But, you know, 14 years ago it was starting in QA, and we've also done, we also do ESG and traceability analysis, and we have an engineering services division and supply chain management.

So we do all these other things.

One thing that means is we have a lot of people in factories looking at equipment, and so that really puts us closer to the supply side, I think, than other firms.

And, yeah, you know, if I can just go into it, you're right there about the dependence on China.

Not only does China manufacture the large majority of batteries globally for lithium ion, but the United States is also very dependent on those Chinese batteries.

Last time I checked, 80% of the supply coming into the United States was using Chinese cells.

So yeah, the supply chain and the overall, the supply chain is very dependent on China.

I would say that if you go up to the refining of the critical minerals used in those batteries were even more dependent on China.

And these that makes for interesting times right now.

And you know, it's an interesting thought that we could onshore and reshore manufacturing to the US.

And the inflation Reduction Act was certainly in the process of doing that.

And we now have 50 gigawatts of solar panel assembly in the US, which is fascinating and a good thing.

Solar cell manufacturing is another thing, and it'll be years before we have solar cell manufacturing.

Quick aside, I was just talking with Sean Shaw, who's going to be a guest in the future.

He's an owner's engineer and a battery storage expert, but he has been to China and visited some factories, and he commented.

Like Tim, I don't think Americans understand how these factories are run.

And does America really want these jobs in America?

Because these are huge facilities that have dormitories attached to the facility where the workers live, and they work almost 80 hour work weeks, and their life revolves around their job, and then they go home on the weekends or whenever they have a day off or a week off, you know, every other month or whatever.

But the schedule is gnarly.

The life is not the typical life of an American.

It's no longer the off to the factory at 7am and home at four with your lunch pail.

We have this kind of 50s nostalgia idea of what manufacturing used to be, and it's to be globally competitive.

It's no longer that.

I don't know if you have any comments about that,

yeah, well, I mean, at CEA we certainly we don't audit labor conditions at factories, so that's not something that we get into.

I will note that when we look at the cost stack labor is only a portion of the cost in factories.

And I've been in battery factories in China too.

And one of the things that I noticed in both the solar and the battery factories that I was at in China is the very high degree of automation.

So these are, you know, there are definitely workers there, but more and more tasks are being automated.

And I think that, you know, there are other advantages that Chinese industry has, in addition to a lower labor cost that might end up being more meaningful, such as the, you know, the industrial ecosystems that they have where they're, you know, when you have factories that are producing so many of the things that are needed in the batteries nearby, when you have that expertise, you know, you start to build up this sort of, this industrial ecosystem.

Absolutely, we just in the United States, we had that.

And then with a, you know, a lot of that, a lot of that industry went overseas.

China started to develop a very robust industry, in part, in very consciously, with a lot of support from the Chinese government at all levels to develop a very robust industry, and now they're the world leaders.

And so it definitely if the United States wants to compete, it does require a high level of support, but it also requires policy stability, and I think that that's been the most challenging thing for companies that want to relocate manufacturing in the United States is every four years, the President has been changing, and we've been seeing these wild policy swings from heavy industrial support to a regime based more upon tariffs and duties.

And it's it's make that uncertainty in future policies, particularly under the current administration, is making it very difficult for companies to plan and site manufacturing in the United States.

I am a fan of a world war two style effort, where the government worked extremely closely and mandated that manufacturers build equipment that was needed for the war effort in World War Two, but the US is not doing anything close to that today, in terms of when the context for that would be to stop climate change, for example, to net zero the economy in a timely manner.

But in any case, here we are in 2025 batteries and micro grids are extremely important to the grid, it's just a question of how quickly we're going to modernize the grid.

It's going to happen.

90% of new energy on the American grid in this day and age is solar, wind and batteries, and then you are immediately hit with this fact.

Like you said, 80% of those batteries are made in China, and we have this thing called Fiat foreign entities of concern, and China is on that list.

And so to get the ITC, you have to abide by fioc.

Lay this out for us.

What is the logic behind the OBB, B and FIAC?

So, you know, I think that one thing that happened not long after the inflation Reduction Act was passed was that a lot of politicians and Democrats and Republicans, by the way, noted that a lot of Chinese companies were setting up manufacturing or planning to set up manufacturing and to benefit from the tax benefits.

And there was a lot of resistance to that.

And that's, you know, certainly I think it's been more one party than the other, but we've seen it in both parties, for sure, and so there have been attempts to try to change those rules to make it so that foreign entities, and specifically Chinese entities were are not able to reap the benefit of US tax credits that has come amid increasing.

Geopolitical and global tensions between the United States and China.

And so I think that that's, I think that's, that's a significant context here.

So anyway, under the OB BBA, we got the foreign entity of concern rules.

And the foreign entity of concern rules are broad and they're varied.

They affect who can claim the tax credits.

So if you are a company categorized as a prohibited foreign entity, starting in 2026 you cannot access the ITC, the PTC, or the 45x and notably, there are a number of different definitions here around foreign entities of concern.

Mostly they're prohibited foreign entities, though sometimes there is a more narrow definition that is specified for an entity.

So then there's also restrictions about the kinds of components that you can use to claim the tax credit.

And I think this is the one that's drawn the most attention, which is the material assistance provision in the ITC, PTC and 45x and that says that, well, for the ITC and PTC, for projects starting construction in 2026 or later, you cannot use more than a certain portion of your components from that are made by foreign entity, prohibited foreign entities, or you lose access to the ITC.

So there's a material assistance cost ratio that you have to meet that's a minimum portion of non FIAC or prohibited foreign entity material.

And that is the and then for factories, starting in 2026 you can't sell components that are made with a certain amount of prohibited foreign entity material, and claim the 45x which is the, you know, that fundamental tax credit that's really allowed the growth of the solar and, to a lesser degree, battery manufacturing industries in the United States since the passage of the inflation Reduction Act.

Now there's another there are more restrictions, though, and I think a lot of people pay attention to the maker, the material assistance cost ratio, but fewer people are watching the effective control provision.

And we see this one as being perhaps the most challenging portion certain, you know, for in a lot of areas where, basically, if you have a long term agreement that provides a prohibited foreign entity the ability to exclusively repair or maintain essential parts of your project, you lose the ITC.

And if you have a licensing agreement that is a new or modified licensing IP licensing agreement since the date of passage of the bill, you lose access to the ITC and you lose access to the 45x so those two right there, those two provisions within the effective control are really, I think, uniquely challenging for companies to work with, given the very strong presence of Chinese companies, both in solar and batteries, and it's it's particularly challenging around manufacturing in the United States, because look at it this way, you have a bunch of battery factories that sell factories that were being built, or in some cases, already were built and owned by Chinese companies.

Now in order to claim the 45x they need to sell those factories, or they need to divest of 75% of their ownership to a non Chinese company.

Or really, you know, you'd have to divest of 60% to a non Chinese company, and then the other 15% well.

But anyway, you have to divest of a majority share.

Now, what are you going to do about the IP?

Because any new IP deal, licensing deal that you make for the new owners to access, or new majority owners to access, the IP for that factory, they're all considered to provide effective control, and they all cause you to lose the 45x

I mean, I'm curious we saw, for example, that t1 bought, I think, a five gigawatt solar Panel factory.

T1 was a battery company out of Norway, and then they pivoted, and they bought this five gigawatt solar, solar panel factory from Trina, I believe, just last year and but let's talk.

Let's just walk through because this is extremely confusing.

Okay, for everyone, for everyone except maybe attorneys that do this day in, day out, and track all this stuff for their clients, and God bless them, and companies like CEA yourselves.

So you're a developer, you want to buy, some, say, 100 megawatts of solar panels and 100 megawatts of batteries.

What is the what are the implications?

Of course, you want to do this as cost effectively as possible, whether you're building flip or build and own right, you want to create an asset that is saleable and.

And and pencils as quickly as possible.

Money talks in energy, okay, what is most economical is what ends up getting deployed.

That is the harsh reality.

You can have all the fantasies you want about sustainability and going green, but money talks, and that's why we're installing so much solar, wind and batteries on the grid now, because the grid operators are going, Hey, that's what is in our best interest as a grid operator from a financial perspective.

Thank you very much.

We're going so walk us through, though, if you're a developer or asset owner, it's a both hand.

Well, how do you, how do you approach this?

Because, yeah, you can buy Made in America solar panels, but the cells were made in China or or Vietnam, with silicon made in China.

And, you know, how do you, how do you kind of strategically approach this, and go, Well, I I need X, Y and Z, or is it, is it simple?

Because there's like, three companies that you can buy solar panels from.

Yeah, so I'll take those, you know, I like to think about it in terms of the different restrictions, right?

So we'll start with the ownership.

Well, look, most developers operating in the United States are not Chinese owned, so there's little concern about their ability to continue to access the tax credit, or Chinese or Russian owned or, you know,

whichever, but the equipment Right, right.

So I'm getting there because I just wanted to put that out of the way, right.

So restriction one ownership probably not a problem, unless you've got some Russian investors you didn't realize about.

Or, you know, because this is not just China, it's China, Russia, around North Korea.

But the one that ends up mattering is China, because that's where most of the actual presence is, right, right?

So then, to get to the material assistance cost ratio, you know, for PV now, you've got a much more limited group of suppliers who you can work with for projects that start construction in 2026 and by the way, one of the things that you do is you just start construction.

Now, you know, you start construction this year.

You start work on a transformer, you know, you get into, if you have access to the site, you get into the site and start excavating foundations, you know.

And those rules changed recently, but that is still a path for the remaining four months of the year.

Is just lock in start of construction now and then.

You don't have to worry about the material assistance cost ratio,

but on that note, assuming that you double that note, Is it as simple as doing some site work and then construction has begun, even if the the site gets worked on for a couple of months, but then goes dormant for three years.

So with the new guidance that was provided by Treasury, I want to say eight days ago.

It was 11 days ago.

So that basically modified so that now utility scale is only affects solar and wind, by the way, not batteries.

So you can continue to lock in, start a construction the same way that you did before, with batteries, through the end of the year, but for solar and wind, that modified starting for projects to start construction on or after September 2, the 5% safe harbor.

So now if the project has an output of 1.5 megawatts AC or above, you can't use the 5% so now you're simply with the physical work test.

Right in that physical work test, there's off site and there's on site work, the off site work.

And there are some debates about some of the language, but the off site work test looks pretty much the same as it did before.

So go get your work done on your transformer, your you know, your main power transformer in a factory somewhere, and you've locked in startup construction because you started work on a component that is integral to the project, and that is not commonly held in inventory or off the shelf.

That is, that is typical, that is a routinely Made to Order component.

The other way is the on site work, and it appears that the on site work has tightened up a little bit in terms of that.

Now it's not just do some site work.

Now it is at a minimum, start excavating foundations, and possibly put that, have to put the trackers of the racking in.

So it's a little bit harder to qualify, based on our read for the on site physical work test than it was before.

But there's still the off site physical work test, and so we still think this is pretty viable.

And again, only for solar energy storage does not include energy storage.

You can keep doing what you've always been doing for started construction.

We think this is honestly, this is not the end of the world, and we think that most solar developers can just do off site work.

What does off site include?

Again?

Well, a

lot of people do it via transformers, and there's a question here.

Basically, you just need to start doing some work on a component that is a Made to Order component, any routinely Made to Order component, not just because you're having it made to order, but it's something that is not routinely held in inventory, like.

PV modules.

So PV modules are something that probably will not qualify for the off site physical work test.

But transformers have been a way that many, many developers and EPCs have typically approached this for start for locking in start of construction.

And the guidance does leave it open that you could also do this start of construction through inverters or trackers.

Now,

so you're saying a developer can just place an order for this equipment, and that starts the off site clock ticking.

Well, you need to the work has to actually start on that equipment at the factory.

So just placing the order isn't good enough.

Some work needs to start on that made to order equipment at the factory

that's really down in the weeds in terms of tracking this stuff.

Yeah,

but look, most developers and EPCs have been doing this to lock in start of construction.

We see this offsite physical work test as being widely used from the developers that we talk to.

Now, again, we tend to talk to some of the bigger developers.

But you know, we see, though, that a lot of those that were using 5% safe harbor will probably just switch over to this off site physical work.

Okay, so the off site test fine, but that doesn't solve the FIAC problem.

Does it?

Well, it does if you start if that allows you to start construction by the end of the year, right?

But if you can't start construction by the end of this year, and you're starting construction next year thereafter, whether you're doing solar or batteries, you're dealing with Fiat, right?

The funny thing is, for solar, you're really only worried about Fiat for about six months to two years, and that's because the way that they set up the expiration of the tax credits, there's this six month period from January 1 of next year through July 4, where you can start construction.

You still have the full four years to complete, but you have to deal with FIAC.

And then if you start construction after July 4 of 2026 then you have to place the project in service by the end of 2027, or you don't get the ITC.

So, you know, there's a more limited window.

But hey, these Fiat rules for batteries, these are around us.

So what I'm saying is, there's, we're going to reach a point in the solar market where people aren't going to be able to get the ITC anyway.

So the Fiat rules become irrelevant for batteries.

You're stuck with the Fiat rules because anybody the ITC will still be available.

This is the irony here, is that because the ITC is still available for a longer period for batteries, the Fiat restrictions are more of a concern, more something that the industry is going to have to get used

to.

I'm thrilled that there's an extended ITC on batteries, but why is that?

I don't think that batteries were as much of a political target as solar and wind.

I think that batteries are seen as something that is just, you know, less it less politically charged, and just something that, you know, we need to run the grid effectively and to have backup power.

And I agree there's something that we need to run the grid effectively.

And you know, they batteries do so many things.

They're, they're, you know, you mentioned earlier, you know, hey, this is about what the grid operators think is, you know, what, what they're looking for because of the lowest cost for solar and wind, absolutely.

But for batteries, I think it's even more because of the technical benefits that they provide.

Whether that's a fast black start, whether that's, you know, just simply keeping the, you know, the voltage and the frequency stability stable, whether it's, you know, accompanying the large shares of solar generation that are producing at some hour, you know, producing during the day and not in the evening, however you slice it, batteries do a whole bunch of things for the grid, and there's a lot of different value streams you can tap into,

yeah, and we are going to 10x the amount of storage on the grid in the next, I don't know, five to 10 years.

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But so let's talk about Fiat and batteries.

One idea that popped up in this conversation with Sean Shaw was just not caring about FIAC because it's still cheaper to buy Chinese battery cell based product.

Bucks, we're talking about batteries now than to worry about Fiat and try to get domestically sourced or content sourced elsewhere.

What are your thoughts about, you know, utility scale batteries, and where can developers buy that stuff and make their projects pencil?

So this is a little bit complicated, because more than a little complicated, you know, one of the details that we've been getting into in the Fiat language is, so how do you qualify, right?

And it says in there, under material assistance, that for the ITC and PTC, you may use N, 2508, but it also says use direct costs.

So we see one route being, I think that there's going to be a lot of battery systems that have very low costs for the cells and much higher costs for the other components in the battery integration that are trying to claim the ITC, what is n 2508 sorry.

N 2508 is the domestic content bonus guidance, and that one of that did was that set out values for what portion of the value comes from which components, right?

So I'm looking at this, and you know, if you if you say, Well, you don't have to use n 2508 and you can use direct costs.

You've just opened this up for integrators to say, oh my, my battery cells.

Look they cost almost nothing, but all my other stuff costs a whole lot more.

Oops, we now qualify.

We're not, you know, we can help you still get the ITC right.

So I expect artificially depressed prices for Chinese cells, Chinese made spells made by Chinese companies.

Because one thing to keep in mind with FIAC is this isn't about geography.

This is about who owns the company, right?

So it can be a Chinese battery maker in Southeast Asia, it can be a Chinese battery maker in Eastern Europe.

If it's a Chinese battery maker, the cells are still something that's going to count against you in that material assistance cost ratio.

Now that being said, All cells made in China fall under Fiat, because one of the definitions of Fiat is if the company is domiciled or operates under the laws of one of these covered nations, which is China.

So that automatically makes it that if the cell is made in China qualifies.

But there's a whole lot of other cells that are made outside of China that are also subject to this fioc rule.

So anyway, that that rabbit hole aside, another approach that developers are probably going to take is, can we blend this?

Can I do a battery project that's got some fiox cells and some non fiox cells?

Because that's how people were going after the domestic content bonus.

In fact, the domestic content bonus guidance gives you explicit directions on how to blend.

Now, whether or not that's going to work, you know, we'll see.

We'll see how well that works, because there's also other challenges to taking that route.

And then the other route is, as was mentioned, screw it.

I can't get non Chinese made battery cells, which is, frankly likely, because when we look at the capacity of non Chinese made cells in sorry cells, not made by Chinese companies in the world for LFP, there's just not enough for the US market, right?

In others would say, you know, for for PV cells, for we might say, well, it's tight.

And so we think that there's going to be shortages, and we think this is going to mean price pressure for battery cells.

There's just not enough, right?

So maybe blending is one solution.

Maybe this creative accounting around direct costs, another one.

And also, maybe there's just a market for companies to say, hey, we're not going to get the ITC, but we've got a really cheap battery.

And, you know, I don't know what different portions of all three of those strategies are going to be used, but those are the three approaches that I see.

So one of the things that the Trump administration has done also is put tariffs on various and sundry places of origin, including China.

How do tariffs factor into this discussion and calculus?

So tariffs are definitely making battery supply for the US market, much more expensive.

You know, there's just no way around it.

The tariffs on China in particular are quite high.

And it's interesting, because no one tariff is that high.

It's the combination of all of them, because you're subject to the old section 301, tariffs.

You're subject to the IEEPA one, the so called fentanyl tariffs.

You're subject to the IPA three, the so called reciprocal tariffs.

And then you add all of this up, and you've got a pretty high tariff and duty, and that's before you get into the anode active material ad CBD, which that one is very complicated, because it applies to some best products.

And not others like it'll apply to cells, but not finished products.

Currently, they may change the scope of the investigation again, even though we already have a preliminary determination Overall, though we're not that worried about that one, because am just isn't that much of the value of a best seller, a final best system.

So even though the tariffs are, you know, 105% to 832% you know, most companies won't have to pay the 832, they'll pay the 105, and that just means 7% extra, right?

But you add all of this up for Chinese batteries, and you take the cost of the price of a Chinese battery coming into the United States market today, and you add all those tariffs, and you take the price of a Korean finished, you know, AC block, or, you know, a battery coming out of Eastern Europe.

And you combine those, you look at those, if you took the prices today and added the tariffs, the Chinese battery would be more expensive.

But this gets to one of the details about tariffs and duties.

Tariffs and duties are not necessarily born.

They're usually born by the end customer, but sometimes the companies will eat part of it.

They'll absorb part of it if they've got it, particularly if they have a healthy margin so they can maintain access to the market.

So we'll see the degree to which the Chinese companies simply say, Fine, we're going to have to cut our prices so we can stay in this game.

But yeah, it is definitely making it so that products made in China are much, much more expensive, and they're going to get even more expensive on January 1, 2026 when the section 301 tariff goes from 7.5% to 25% and they're assuming that IEEPA Three goes into effect at the higher rate of 34% they're going to get More expensive on November 10.

So it's sort of the situation right now where it benefits companies to bring in product from China quickly, maybe because they're starting construction, trying to lock in start of construction, maybe because they're trying to beat the tariffs, probably because they're trying to do both.

So to get the product in country now lock in start of construction.

But then after January 1, 2026 suddenly you're subject to fiat restrictions.

Suddenly you're paying much higher tariffs.

And so then that's where we see the procurement shift to all of these other locations.

Maybe this is Chinese companies manufacturing in Southeast Asia, where there are tariffs under IPA three, but they're lower.

Maybe this is companies trying to procure the small amount of Korean made cells that I'm sure going for a healthy premium these days.

Because this is a huge opportunity, by the way, for non Chinese owned companies in the battery market, particularly those making cells.

So that's the other thing that we see happening is we see companies starting to China, Korean owned companies, starting to shift their EV battery plans over to stationary to battery to sells for stationary best because look, their EV market just tanked because of the section 30 D and the Other clean vehicle, the other EV tax credits going away a month from now, but there's still a market to make best, and it has just so happens that they have a product for which there is a premium on the market because it enables their customers to continue to claim the ITC.

So we're seeing a bunch of that in the United States.

But even then, even with factory shifting over one that takes time, and it's not cheap, right?

And we look two or three years out, and we still don't see enough battery supply made by battery cell supply made by non Chinese companies to serve this market.

So, long and short of it, if you're planning to buy batteries in 2026 or later.

I mean, let's face it, we're in we're for all intents and purposes, we're in q4 of 2025, and and so if you're planning on 2026 You're certainly following what's going on in China, but you're trying to figure out, Okay, can I get product from Korea or what other places Taiwan?

What other places will developers and asset owners be looking to source batteries and solar?

Well, it's different for batteries and for solar, right for batteries Southeast Asia, but most of those are Chinese owned.

So that's not going to help you with the Fiat Eastern Europe.

There's some capacity coming online.

That's Korean owned.

The Japanese companies have been slower.

There's, I think there's some, but it's really thin.

Mostly, we're talking about Korean owned companies, and they, those are coming from Korea.

They're coming from the United States, and they're coming from Eastern Europe.

For solar, this one gets even harder, because now we're suddenly not just trying to comply with the foreign entity of concern rules, but we have the solar three ad CBD, which made it essentially has shut off supply.

From Cambodia, Thailand and Vietnam, at least that with cells made in Cambodia, Thailand and Vietnam, right?

Because you can still make modules there if the cell comes from somewhere else and not be subject to solar three.

Now we have the solar four case against Indonesia, India and, sorry, in Laos.

And so those are even more locations where you can't source cells.

So now you're looking at cell supply that comes not from China, because there's already duties there, not from Taiwan.

There's duties there, not from Cambodia, Malaysia, Thailand or Vietnam, not from Indonesia, India or Laos, right?

So where are you looking that's not subject to ad CBD, you know, Turkey, but some of those are Chinese owned.

And so then you're running into Fiat again.

And then you've got, well, there's a cell factory operating in Ethiopia, you know.

And then you have the US suppliers, some of which are using Korean cells, which are not subject to adcbd.

It's one of the only Asian nations that has cell manufacturing that is not subject to adcbd.

So US manufacturing using Korean cells.

You're looking at first solar they're thin film, and you're looking at the very, very thin amount of us made cell that is available, which, right now we see two gigawatts of operational capacity.

There's a third gigawatt that's, we believe, is in the ramping phase right now that should be online.

And then, you know, there's a lot more factories planned that are including there's a lot more factories that are importing equipment and getting ready to ramp.

But even then, it's going to be a small portion of the cell supply that's needed for the total US market.

And so, you know, it's basically like the battery conundrum, in that you don't have, you know, I think at the end of the day, the people will be piecing together.

It's certainly worse for batteries, because with batteries, you clearly don't have enough supply, right?

With PV, if you piece together all these weird little locations of cells, including for manufacturers that may not have the track record that you really want to buy from them, or the certifications for the US market, you know, I think you you might be able to hobble together enough supply for the US market, but it's going to be tight and prices are going to be higher.

What about?

I mean, we have Tesla.

We have American battery factory.

I just did an interview with Etika AG, which is a Taiwanese company building a factory in the US.

I mean, do you do you see, like we did with panel manufacturer, right?

We've, we've now scaled to 50 gigawatts of panel assembly in the US.

It's amazing.

This is we don't have the cells.

But what is the, what is the production volume of America, Made in America, battery cells.

It's it's far below our it's a small fraction of our current capacity, because the factories that you're talking about either the sell portion has not come online or and listen, there's a lot more integration, but I'm focused on the sell side, right?

It's low.

Yeah, because that's ultimately the bottleneck here, and it's the the the amount of capacity.

And I usually don't like to talk about the names of manufacturers unless they're just a very specific circumstance it's something fairly broad.

But you know, the capacities that we have online, we're looking at one big Korean company, and we're looking at a whole lot of other smaller capacity, and we're looking at more coming online.

But it's the cell capacity in the United States for batteries is not anywhere near what demand is, and it's not going to be for the next two or three

years.

Just as perplexity, it says 16 to 20 gigawatt hours of Made in America battery cells.

That is not what that is higher than the figure that we have.

And I wonder how many of the plants that it's counting on either have not come online yet or are in the ramping phase, and thus are not

I mean it says here, LG which is Korean company, operates a 16.5 gigawatt hour cell production facility in Michigan.

High thm recently opened a 10 gigawatt hour LFP battery cell plant in Texas.

AESC runs a three gigawatt hour plant in Tennessee, and it doesn't give the volume of Tesla.

So anyway, well,

Tesla is not right now, to my knowledge, making cells.

I think they have plans to make cells.

Oh, they make cells.

They make cells in Nevada,

for EV or ESS

Oh, for for EV for sure, I don't know about for stationary, yeah, good,

right?

So one of the places where we end up having a smaller, actual effective capacity, yeah?

Um, yeah, right now that

looks like Tesla's building an LFP cell factory, right.

Right now we have four manufacturer.

Some of whom you have named, and we have 12.9 gigawatts of capacity.

Because, again, some of this capacity is not online yet.

Some of it's ramping, and some of it is EV capacity, which, you know it is, unfortunately not true, non trivial to switch over from EV battery production to stationary storage production.

Yeah, totally different.

I mean,

I mean, it's, the thing is, it's, it's worth doing it sometimes, because you do have an LFP factory, you've got some of what you need, but it's just, it's, it's a, it's a pretty significant conversion issue.

You're not starting from zero, but you're a long ways.

If you have an EV battery factory for making stationary batteries,

yeah, it looks like the Tesla Nevada facility is targeting 10 gigawatt hours for stationary storage, and LG is 16.

So that's 26 gigawatt hours.

I don't know what the the question, I guess, that I need to answer is, how many gigawatt hours are we installing per year?

You've got numbers.

Okay, how much are you installing on an annual basis?

So

it looked like last year we installed 45 gigawatt hours, and this year we're expected to install 55 gigawatt hours, and then in 2026, 75 gigawatt hours, if we have the capacity for it.

But you know, in terms of total available supply, including that, that's ramping for this year from the United States, we're looking at 27 gigawatt hours from from the CEA side.

So, and then, you know, here's the problem.

Is our capacity increases, but as our capacity increases, the demand increases.

And that's where we just there.

Just does not it doesn't add up.

Yeah.

All right, well, in our last couple of minutes together, Christian, what else should our listeners know about battery and solar supply chain?

Like how to navigate these waters?

I guess they that my takeaway is, you have to hire experts like yourselves.

We are seeing a lot of demand for our services.

We're gonna have to hire some more people.

Christian, yeah, I know.

And we're seeing a lot of demand on the Mi side, in particular, navigating all of this incredible policy.

What is mi market intelligence?

You talk in acronyms, brother, sorry, we get

so used to acronyms.

Yeah.

So we're on market intelligence.

We're seeing a lot of demand for our services.

I think there's also a lot of demand for our traceability services as well, because now we've got questions.

Look, if you're importing goods, UFL, the Uyghur forced labor Prevention Act, has not gone away, by the way, yeah, and they just added lithium to the list of priority sectors for enforcement.

So there is an elevated risk right now that batteries will be detained under UF LPA, and we didn't even talk about that, right?

So not only do you need to know what your supply chain is, so that you can know whether or not it is Fiat and whether or not you can claim the tax credits, but you should probably be keeping an eye on your supply chain to make sure that you're not importing goods that could be detained by customs and may not be able to get out of detention.

And so that's, you know, that's, that's a big concern there.

And you know, what am I in the market intelligence division, we advise on that in our ESG and traceability division.

We actually go into factories and monitor to see, you know, check to see if they actually have the traceability mechanisms to make sure they know what goods are coming in and to segregate goods effectively, right?

Because this ends up becoming a technical problem for the sort of compliance as well.

Is there a standard approach to this, though, is there a standard, okay, I got a letter from a third party that verifies it meets this labor requirement.

Well, to be clear, we do not verify.

We do not do labor audits, right?

That's just not we do.

What we do is we check the provenance of materials.

We check to make sure that the systems, and really we check to make sure that the systems and the policies are in place, that you can know the provenance of materials and that you can accurately trace them.

Because provenance of materials right now, anything from coming from Xinjiang, the Xinjiang Uyghur Autonomous Region in western China, is considered to be made with forced labor and is formally banned by the United States, and if it's found it will be rejected, right?

And and China's approach is to just consume that stuff domestically.

Is that their approach?

Yeah, I think, I think that a lot of the product that has not has been prohibited under UF LPA has gone to the domestic market.

We've also, frankly seen supply chains shift outside of Xinjiang, and particularly in polysilicon.

We saw a lot more polysilicon be built in other Chinese provinces, following the various prohibitions that started even before uflpa on goods from Xinjiang in this sector.

So.

So I think that's, that's, you know, that's a big part of what's going on here.

But at this point, even goods coming from other provinces in China are potentially subject to UF LPA, and you really just need to know your supply chain.

You need to know where your goods are coming from.

Because if not, you could be in trouble in a number of ways, between losing access to tax credits and having product detained at the border or rejected or just told, Hey, this is not allowed into the United States.

And you know, a lot of the problem with uflpa compliance isn't people trying to bring in goods from Xinjiang.

It's people trying to prove that their supply chain doesn't have goods from Xinjiang, because it's a negative of suffering if you get detained, it's not the government's job to prove that you have goods from Xinjiang.

It's your job to prove that you don't, and if you don't have the paperwork going back all the way to the mine, to prove that you're not getting in.

Hey guys, are you a residential solar installer doing light commercial but wanting to scale into large CNI solar.

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Thanks so much.

We got to wrap it up.

I want to thank Christian Roseland, Senior Policy Analyst with clean energy associates, for coming on the show.

Please check out all of our content at Clean Power Hour comm.

Give us a rating and a review on Apple or Spotify.

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I'm easy to find Christian.

How can our listeners find you?

Well, you can come to CEA3.com you can shoot me an email at C Roselund at CEA3.com Roselund is l, u, n, d, you.

And you can, you know, just look us up on where we are, including on LinkedIn, we have a pretty active and sometimes snarky presence there, though, I think that sometimes my comps people would like me to tamp that down.

All right, I'm Tim Montague, let's grow solar and storage.

Thanks so much.

All right, thank you.

Tim, great being on the show you.