In what the businesses referred to as one of the largest-ever agreements of its kind, South Korea’s Qcells said on Monday that it will provide Microsoft (MSFT.O) with 12 gigawatts of solar panels manufactured in the United States through 2032.
The deal guarantees a significant and consistent market for the panels that Qcells will produce at its new $2.5 billion facility in Georgia. Thanks to this agreement, Microsoft will achieve its objective of running its business entirely on renewable energy by 2025 since the company is looking for a dependable panel provider to lower supply chain risks.
“How do we really make sure that we can meet those goals in this kind of environment, as we see others coming in and doing the same thing?” Microsoft’s vice president for energy, Bobby Hollis, stated this in an interview. “We have to really undertake things in a very strategic and thoughtful way.”
The two businesses originally agreed on a 2.5 gigawatt transaction a year ago. According to the firms, Microsoft will boost its overall commitment to 12 GW—roughly 1.8 million homes—through this enlarged deal.
According to Qcells, the partnership with Microsoft would enable it to build a solar supply chain in the US to rival China. The business will produce the modules themselves, along with silicon ingots, wafers, and cells.
Presently, most US panels are constructed using parts sourced from Asia, where costs have significantly decreased over the past 12 months. President Joe Biden’s Inflation Reduction Act includes incentives to increase American manufacturing of renewable energy components to lessen dependency on commodities made elsewhere.
“Only we are actually constructing the entire supply chain. And we’re able to do this because of our collaboration with Microsoft,” said Jihyun Kim, executive vice president of Qcells, a branch of Hanwha Solutions Corp. (009830, KS).
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