The U.S. was finally catching up. After decades of watching solar manufacturing develop overseas, mostly in China, the Inflation Reduction Act gave domestic producers a fighting chance. Texas responded in a big way. New factories broke ground. OCI and its sister company, Mission Solar, prepared to launch a full supply chain operation in San Antonio, including the rare addition of cell manufacturing, one of the most critical (and missing) links in our solar economy. Now? All of it hangs in the balance. I sat down with Sabah Bayatli, President of OCI Energy, for one of the most urgent and clarifying conversations we’ve had on this podcast. If Congress moves forward with budget as it passed the House, it could wipe out hard-won progress in U.S. energy independence and kill manufacturing momentum. This is not only an energy and economic issue, but also a national security issue. We covered: What the IRA Actually Did for Solar Manufacturing Before the Inflation Reduction Act (IRA), manufacturers in the U.S. were forced to make short-term bets, never knowing if tax credits would last. That’s a terrible way to plan billion-dollar infrastructure investments. The IRA changed that. By giving developers and manufacturers a 10-year time horizon, it triggered a surge in U.S. supply chain planning. Sabah put it simply: You can’t invest in manufacturing without a longer time horizon. * The 45X tax credit provided per-unit production incentives. * Developers got extra credit for using U.S. made solar panels, creating demand. * Factories started popping up, especially in Texas, where low power prices make large-scale manufacturing viable. Now, that long-term signal is under threat. What’s in the “Big Beautiful Bill” That Could Undo It All Sabah broke it down for us: the current House version of the bill would eliminate developer tax credits by 2028, with an abrupt cliff 60 days after enactment. And while the latest Senate version is slightly better, it’s still a cliff: * Full credit in 2025 * Drops to 60% in 2026 * 20% in 2027 * Zero by 2028 The manufacturing credit technically stays, but if developers lose the adders for domestic content, American manufacturers lose their market. DC’s Math Doesn’t Add Up Everyone agrees: the deficit matters. But what’s often missing in DC is that you can’t shrink your way out of the deficit, you have to grow out of it. Growth means: * Domestic manufacturing jobs * Local tax bases * Energy independence * Lower-cost power I covered that in much greater depth here: Timestamps * 00:00 – Introduction & opening context * 01:45 – What is OCI Energy? * 03:30 – OCI’s origin story in San Antonio * 5:00 – The elephant in the room: the impact of the not-so-beautiful bill * 10:00 – Investment signals leading to solar module and solar cell manufacturing * 13:00 – Manufacturing tax credits (45X) * 15:00 – The need for low cost power to spur economic growth to lower the debt * 20:00 – Lost cost power in ERCOT is attracting manufacturing of all kinds * 23:00 – Supply chain issues across the power sector * 25:30 – The need for moderate, durable policymaking, gradual ramp of incentives * 31:00 – The retention of the manufacturing tax credit won’t necessarily help * 34:00 – Where panels used in America are manufactured (hint: not China) * 38:00 – The need to communicate national security implications * 41:00 – To grow our economy, and reduce our debt, we need a lot more power (see chart discussed in this segment in Resources section below) * 44:45 – How to design Foreign Entities of Concern (FEOC) provisions well * 52:00 – Texas policy and the recently concluded legislative session * 54:45 – Is there a future for solar and battery manufacturing in America? * 58:30 – What could the Senate do to grow American manufacturing * 1:00:30 – Final thoughts, closing remarks Resources Information about Sabah and OCI * OCI Energy * Mission Solar * The chart Sabah sent me after he read Energy Submission: Discussed in the Episode: ‘City of San Antonio Solar Development Plan. April 2012. H.R. 1, One Big Beautiful Bill Act (Dynamic Estimate). Congressional Budget Office (CBO). Transcript Doug Lewin (00:05.426) The solar manufacturing renaissance in America, and particularly in Texas, is very much at risk as Congress considers a budget bill that would end solar incentives and clean energy manufacturing incentives. Welcome to the Energy Capital Podcast. I'm your host, Doug Lewin. My guest this week was Sabah Bayatli. He's the president of OCI Energy. OCI Energy is both an IP and a project developer throughout the U.S. installing solar and storage, but also a manufacturer through their sister company, Mission Solar. And Sabah told me that that manufacturing plant, which currently produces modules and was getting ready to expand to cell production with 800 Texas jobs, is at risk and will not proceed if the bill in Washington passes in its current form. We talked about that and a whole lot of other things both related to the bill, but also talked about Texas policy, solar in general, what it means for the economy and growth. This was a great discussion and extremely timely. And I thank you for listening and we'll ask one more thing of you: if you can give us a review wherever you listen or particularly leave a five-star review, that is super helpful for our small but fast-growing podcast so that other people can find it. And I greatly appreciate it. You can find all the episodes of the Energy Capital podcast, become a subscriber to the podcast and to the Texas Energy and Power newsletter at douglewin.com. With that, please enjoy the show. Thanks for listening. Sabah, Bayatli, welcome to the Energy Capital Podcast. Great to have you. Sabah Bayatli (01:41.426) Thank you, Doug. It's wonderful to be here. Doug Lewin (01:43.896) So can we just start with a very brief little background? Folks may not have heard of OCI Energy. Tell us a little bit about OCI and Mission Solar. Sabah Bayatli (01:52.536) Quick background: OCI Energy is a developer and IPP for utility scale solar and battery energy storage systems in the U.S. We have been operating since 2012. We are headquartered in San Antonio, Texas. OCI Energy is a subsidiary of OCI Holding, a South Korean conglomerate based in Seoul. They have multiple businesses worldwide. I would say one of their core businesses is polysilicon manufacturing. For the audience, people who are not familiar with polysilicon, you can think about it as the raw material basically to the solar panel. It sits very, very upstream. In fact, I think they are the second largest polysilicon provider in the world if you take the Chinese manufacturers out of the list. That's a fact about OCI Holdings' operation on the polysilicon business. In the U.S., they have OCI Enterprises. You can think about it as a sub-holding company basically to the U.S. market. Under OCI Enterprises, there are multiple operating companies. One of them is OCI Energy, the developer and IPP for utility-scale solar and battery energy storage. We also have a sister company here in San Antonio as well called Mission Solar Energy. They are a manufacturer for solar panels. They also started business in 2012, 2013. In fact, when they started, they were producing cells in the early days as well. Today, they are producing solar panels. And we can talk more about them in the next few minutes. Doug Lewin (03:20.268) Yeah, it's interesting. A long, long time ago, I was involved in a lot of discussions in San Antonio in that kind of 2009, 10, 11 period when they were looking at how to develop a clean energy economy in San Antonio. I have not super sharp memories of that period, but some, and it's really gratifying and neat to see you guys there as such a big part of San Antonio and of that ecosystem. Sabah Bayatli (03:46.862) It brought us actually to town in 2012. What brought OCI Company to San Antonio and brought all these manufacturing jobs and basically development jobs to San Antonio. Today we are headquartered in San Antonio. We basically service all the U.S. on the development side as well as on the manufacturing side. But if you go to the story, actually the way OCI Energy, the OCI Company actually penetrated the energy market in the U.S., it was through an economic development agreement with the city of San Antonio. Yes, through CPS Energy, the utility. This is our public information. So in 2012, there was an economic development agreement entered into. With that, we had a commitment basically to develop up to 500 megawatts of solar projects. In 2012, it was a huge deal, right? So, and we did develop them, and in exchange, we got offtake agreements basically with CPS. And what we gave was we gave an overhead commitment to the city of San Antonio. So we had to bring manufacturing, we had to assemble the factories here. OCI Energy was assembled at that time. It was called OCI Solar Power. We actually brought inverter manufacturing to San Antonio as well. We brought a big EPC from Minnesota called Northern Central to open a branch in San Antonio too. That was a huge commitment actually by OCI Company to the city. It ended in 2020-22. But to your point, I think you can see the fruit today. The company's still operating in San Antonio. We are creating a lot of jobs basically for San Antonio and Texas, and this is a new technology and this is a new industry. Doug Lewin (05:17.868) Yeah. So I think we need to jump into kind of addressing the elephant in the room here, Sabah, which is right, you guys are a manufacturer in the United States, right there in San Antonio, here in Texas. And that had a first mover from some city initiatives, but over the last couple years at the federal level, congressional bills, particularly the Inflation Reduction Act, but also the Bipartisan Infrastructure Law put in place a lot of incentives for manufacturers. Can you talk a little bit about what i
