OSLO, Norway — Despite posting a loss for the second quarter of 2022, REC Silicon President and CEO James May said the restart of the company’s solar-grade polysilicon production facility in Moses Lake is looking better than originally forecast, thanks largely to major federal legislation aimed at creating and supporting solar power component production in the United States.

Speaking during a conference call late Tuesday — early Wednesday morning in Norway, where the company has its headquarters and is publicly traded — May said REC Silicon is also negotiating an arrangement to sell 100% of its solar-grade polysilicon output to South Korean solar panel maker Hanwha Solutions, and expects that deal will be finalized later this year.

“Moses Lake restart is looking better and better,” May said during the conference call.

However, May was coy when asked if an announcement in late spring by Hanwha Solutions — which owns a 21% stake in the company — that the company was planning to invest $170 million in a new solar panel production facility in the United States meant Hanwha would build that facility in Moses Lake.

“I will leave that answer to Hanwha,” he said.

Hanwha Solutions makes its Q Cell solar panels at a factory in Dalton, Georgia, but is seeking to build a second U.S. solar panel production facility.

May cited three pieces of recently passed federal legislation — the Inflation Reduction Act of 2022, which President Joe Biden signed into law Tuesday; the CHIPS and Science Act of 2022; and the infrastructure Investment and Jobs Act passed by Congress and signed into law in late 2021 — as improving REC Silicon’s financial position by encouraging the growth of domestic solar panel manufacturing and advanced rechargeable batteries that use silicon anodes.

The Inflation Reduction Act provides $370 billion in tax incentives for consumers and businesses that produce or invest in renewable energy products like solar panels and their components. May said under the new law, REC Silicon will be eligible for a $3-per-kilogram refundable tax credit for every kilogram of solar-grade silicon the company sells.

“That will have a favorable impact of $48 million per year at full production,” May said of the tax credit.

REC’s current plans involve restarting production in late 2023 with the company at full output by the end of 2024, May said, adding during the conference call that those plans remain unchanged. In fact, May said the company is currently hiring new staff and rehiring former employees to get the company’s production facilities up and running on time.

May said REC is the only large-scale producer of silane, or silicon gas, in the United States and Europe, at a time when the West is attempting to lessen its dependence on Chinese-made solar products and electronics.

“This will drive REC’s success as we move forward,” he said.

While REC is not set to benefit directly from the other laws, May said they create conditions that are intended to boost demand for the company’s solar- and electronic-grade silicon. The CHIPS and Science Act is intended to expand domestic production of semiconductor chips, which are made out of electronic-grade silicon REC produces at its facility in Butte, Montana.

“These will develop new markets for silane and accelerate the development of clean energy technology,” May said. “We are well positioned to benefit from each legislative package.”

The company produces silicon for use in the electronics industry — solar-grade silicon for solar panels in Moses Lake, and electronic-grade silicon for use in making computer chips and flat panel displays in Butte. The facility in Moses Lake uses a proprietary, continuous process that allows it to produce solar-grade silicon at lower cost. However, a trade war began between the U.S. and China in 2013 when the U.S. imposed tariffs on Chinese solar panels. China retaliated with tariffs on REC’s silicon that prevented the company from selling to Chinese solar panel markers, eventually prompting the company to cease production in Moses Lake.

May said the cost of restarting production in Moses Lake has also risen to an estimated $150 million, in large part because the company will refurbish all 12 of its fluid bed polysilicon production reactors in Moses Lake as well as build a new testing lab and upgrade its packaging facility to meet new requirements. The company is looking at its financing options, and currently has roughly $172 million in cash on hand, May said.

REC Silicon posted a loss of $1.1 million for the second quarter of 2022 despite a significant increase in sales largely due higher electricity prices at its Butte facility, more costs incurred as the company prepares to restart Moses Lake, and the rise of the value of the dollar in relation to the Norwegian krone, May said.

Shares in REC, which is traded on Norway’s Oslo Børs stock exchange, ended Wednesday trading session at 23.10 Norwegian kroner ($2.39) per share, up nearly 1% from the previous day’s close. The value of the company’s shares have increased 56% in the last year, according to trading data available at REC’s website.

Charles H. Featherstone can be reached at cfeatherstone@columbiabasinherald.com.