The U.S. solar industry is desperate for domestic manufacturing expansions, but it’s also currently difficult to get things moving. Between global supply chain interruptions due to COVID and the constant barrage of tariffs on solar products, it takes a lot of gumption to start a new venture. Crossroads Solar has a tough road ahead, but with strong community support it’s pushing for success.
The new solar panel assembler in South Bend, Indiana, is small — two shifts expect to produce 12 MW of crystalline silicon solar panels annually — but its mission is mighty. Crossroads Solar’s goal is to “produce perfect solar modules with people who made mistakes.” Crossroads employees are released felons who have “served their time and earned the opportunity to re-enter the workforce with dignity.” The for-profit company’s focus is on employment more than solar output.
The idea behind Crossroads comes from Patrick Regan, a political science and peace studies professor most recently at the University of Notre Dame, and technology businessman Marty Whalen, both of whom taught college classes at Westville Correctional Facility through the Moreau College Initiative. The pair wanted to find a more tangible way to transform how society thinks about crime and punishment and provide job support for the formerly incarcerated.
“I wanted to create a company that could demonstrate that American manufacturing could be competitive, and most importantly, that a workforce that we far too often discard because of past crimes can be the source of that competitive capability,” Regan said. Viewing the solar industry as a 21st century business, he considered a solar module manufacturing entity as the perfect way to maximize three Ps: people, planet and profit.
Crossroads is starting employees at $16/hour with insurance and retirement help. The first shift will have 12 people on the floor producing both 60- and 72-cell monocrystalline solar panels. Further growth is dependent on the market and supply — which right now is causing quite a headache, Regan said.
Solar Power World traveled to Indiana to see the new factory finally getting started in September 2021, two months later than Crossroads Solar’s initial plan. We talked with Regan about the difficulties in starting a new solar panel plant today, mission-driven or not.
SPW: What prevented Crossroads Solar from starting production in July as planned?
Regan: This is all after producing a panel and getting it certified [which was completed in late 2020/early 2021]. I have an email from a supplier saying, “Your product will arrive on July 15,” and that was our expectation. We expected our pieces to arrive in mid-July 2021 and they arrived mid-September.
I’m not a supply chain guy, but here’s my thinking with my political science background: We had built up a system that was in equilibrium over decades where product and containers flowed seamlessly around the planet. When they shut down in March 2020 from COVID, the containers stopped where they were. The system went out of equilibrium. When we started up again, everyone wanted Chinese product but all the containers were over here. No one wanted to send an empty ship with containers to the product. It still hasn’t resolved. It won’t until that equilibrium gets re-established.
We got caught in that.
SPW: Where did you get your manufacturing equipment like the stringers and laminators?
Regan: I shopped equipment from Spain, Mexico, Germany. I didn’t have a lot of money, and I needed to buy equipment, so I initially looked at used equipment. It was probably good equipment but it was already obsolete. It didn’t make sense to pay the same price for equipment that would quickly have me producing panels that nobody would want. I looked at new equipment out of Mexico, and to flesh out the place was over $1 million of equipment. So I went to China. I did some research and looked at a couple factories and it was one-quarter the price. So I bought Chinese equipment. But then COVID shut China down in January 2020, which was when our equipment was scheduled to be produced, and then we couldn’t import it. It just stretched out.
SPW: Has the lack of American-made solar components surprised you? You had to get solar cells from Vietnam, glass from India, junction boxes from China, and it’s been a struggle to get frames.
Regan: I expected frames to be from here. We are near Elkhart, Indiana, which is a big aluminum extruder for the RV industry. I’ve reached out to them on a number of occasions, and they just tell me they’re too busy to deal with me. It surprises me that I can’t find a local aluminum extruder to make our frames. So I ship the frames in from China, which seems to be the industry standard. I paid a 111% tariff on those frames.
EVA and backsheets, I purchased initially from the United States, but in the world of being a startup and small, they treated me like I wouldn’t be around tomorrow. I liked their stuff, but they sent me old product that was off the shelf. When it just bubbled, they said it’d been on the shelf for three months. And since I needed such a small quantity…I got the EVA and backsheet from India, and it doesn’t turn out to be cheaper than I can get in the United States. It’s just I have confidence in [the quality]. Until they see that I will be in business, I think they’re always just going to treat me poorly in that regard.
Some stuff you’re just not going to get in the United States. I know there are no cell suppliers in the United States, so cells are going to come from overseas. I was surprised by that. On our initial webpage, I say I’m going to source everything from the United States. That was my hope. It didn’t work that way.
SPW: How are these supply chain issues affecting Crossroads as it starts up and builds industry relationships?
Regan: The hard part is that everyone expects the supply chain to be more gobbled up for the Christmas holidays to the extent that Target and Home Depot have rented their own freighters to bring in their products. That just makes it hard on someone like me who brings in a single container. I’m guessing other bigger solar manufacturers are going through the same thing, they just have more ability to weather the storm.
We’re going to produce solar panels and sell them. I have been in discussions with the RV industry because I have panels certified for RVs. We are in discussions with design and installation people in the region. We’re going to sell panels to generate revenue to buy more products. I hope that can come in a time that doesn’t force us to go dormant. Once our current product runs out, to keep us producing, I have to order stuff now to get on ships. Places like Target and Home Depot are sucking up all the variation in the transport. If I don’t get in the game now, we’re going to have to shut down for a couple months until the supply chain delivery process plays itself out.
I don’t have the cash to order right now. I have to let revenue generate the cash. In the initial model, it would be doing just fine, because I have enough product now to sell panels and have cash to order. I’d be ordering in a six-week window. But now that delivery time has shifted out from six weeks to 18 or 24 weeks, someone like me…it’s really hard to do. I’m hoping it works out.