Microsoft has signed an eight-year cope with the most important U.S. photo voltaic producer, Qcells, to provide the corporate with sufficient photo voltaic panels so as to add 12 gigawatts of photo voltaic electrical energy to the U.S. grid.

For perspective, that’s about one-third of the solar energy added to the U.S. electrical grid in 2023, in accordance with information from the Photo voltaic Vitality Industries Affiliate and Wooden Mackenzie. The panels are meant for photo voltaic farms that Microsoft helps construct to offset the electrical energy consumed by its ever-expanding information middle footprint. They are going to be able to producing sufficient electrical energy to energy 1.8 million properties.

Microsoft beforehand dedicated to purchasing 2.5 gigawatts from Qcells over an unspecified interval. Other than the panels, Qcells, a part of a South Korean provider, is offering engineering, procurement and building providers. It’s investing $2.5 billion to construct new photo voltaic factories in rural Georgia.

Monetary phrases of the alliance weren’t disclosed. 

Hedging towards provide chain shortages

The connection will assist Microsoft get photo voltaic initiatives accomplished extra rapidly, mentioned Bobby Hollis, vp of power, who joined the corporate in October. The deal requires a provide of about 1.5 gigawatts of modules per 12 months by 2032. “Now we have to ensure what we’re doing may be accomplished at a big scale,” mentioned Hollis.

Microsoft has pledged to cowl all of its electrical energy consumption with renewables by 2025. As of August, the corporate had signed contracts to purchase greater than 13.5 gigawatts of photo voltaic, wind or different renewable power in 16 markets. “There are loads of gamers which might be competing for robust growth property and to determine tips on how to take part extra strategically earlier on,” Hollis mentioned. “Now we have to get entangled a lot earlier.”

Greater than 1,000 procurement offers had been signed by companies globally within the first half of 2023, in accordance with S&P International. Many corporate-backed initiatives have been gradual to come back on-line within the U.S., stymied by tariffs on panels imported from China and allowing delays for the interconnections required to carry photo voltaic and wind farms onto the electrical energy grid.

“Provide chains can develop into a bottleneck,” Hollis mentioned. “Now we have to ensure that when surprises occur, we are able to nonetheless make our dedication.”

The Qcells relationship isn’t unique, which suggests Microsoft may supply panels elsewhere if wanted, he mentioned. Likewise, Qcells is discussing related relationships with different prospects, mentioned Jihyun Kim, govt vp of Qcells USA.

‘Sustainably made’ within the USA

The deal was made potential by tax incentives within the Inflation Discount Act meant to spur extra home photo voltaic manufacturing. Qcells’ investments, each in Georgia and in Washington state, are the largest for the U.S. business, the corporate claims. The corporate has claimed a number one share of U.S. photo voltaic panel shipments for a number of years. It’s already producing about 5 gigawatts of panels and photo voltaic elements yearly in Georgia, mentioned Kim.

Qcells says its photo voltaic panels are “sustainably made.” It’s one in all a number of producers in search of certification underneath the EPEAT for Photo voltaic program, a information that helps federal companies purchase low-carbon merchandise.

The polysilicon in Qcells’ panels is made utilizing hydropower in Washington state (most different producers are nonetheless on coal). And the corporate can also be making its metal frames for photo voltaic installations lighter, to chop down on supplies, mentioned Kim. “Down the highway, recycling of the panels, which we are going to help, may even be an vital piece,” he mentioned.