VSK Energy backed by Vikram Solar to invest $1.5 bn in new US factories

A new company 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 formed company, VSK Energy LLC, aims to leverage India’s vast solar manufacturing know-how in driving the United States to build a clean energy manufacturing sector to compete with China.

The announcement is the latest by an outside manufacturer seeking to leverage 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 properties 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 a number of Indian companies get into manufacturing and do well, and Vikram is the best of them all.”

The company will begin producing modules in Brighton, Colorado, next year and plans to open a second facility in an undisclosed southern state in 2025 that will produce cells, wafers and ingots, the building blocks of solar panels.

The $250 million Colorado facility will create more than 900 jobs and will be able to produce 2 gigawatts of units per year initially, with plans to double that amount.

Colorado Gov. Jared Polis called the announcement a “big deal” for his state, which was able to attract the facility with an educated workforce and a central location near large US solar markets. The state is also providing VSK with up to $9.1 million in job creation-related tax credits.

“We are excited as a country to be a major manufacturing hub 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 manufacturing.

“For us to move forward with this step is because of all the positive policy initiatives by the government and the Biden administration to promote renewable energy,” he said in an interview.

Under the International Credit Act (IRA), solar projects built with panels containing homemade cells may receive a lucrative tax credit of 10% of the project cost. Most solar components in US projects today are 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 production and imposed import taxes to reduce its dependence on Chinese imports and is on track to become self-sufficient by 2026, according to the Institute for Energy Economics and Financial Analysis.