Highland Materials Advances U.S. Polysilicon Plant Amid Tech, Policy Doubts
Highland Materials, a U.S.-based producer of polysilicon and aluminum, is moving forward with its plan to build a solar-grade polysilicon facility in its home state of Tennessee, with construction expected to start within the next year.
On Aug. 6, the company executed a long-term ground lease with Pivotal Manufacturing Partners, a real estate investment platform which recently acquired 140 acres at the site of the former planned Phipps Bend Nuclear Plant in Hawkins County. According to Pivotal’s news release, Highland’s leased portion of the site will house the planned polysilicon plant.
Highland Materials first unveiled its polysilicon plant initiative in April 2024, announcing it had secured $255.6 million in 48C tax credits for the project. At the time, the company disclosed an initial capacity target of 16,000 metric tons per year, with plans to expand to 20,000 mt within four years, but withheld details on the plant’s location and construction schedule.
“Partnering with Pivotal Manufacturing Partners is a critical step needed to move the Highland polysilicon manufacturing facility forward at Phipps Bend,” said Richard Rast, chief executive officer of Highland Materials, in Pivotal’s Aug. 6 statement. “We are excited about the market opportunity, the job creation, the capital investment, and the continued community and state-level support this project enjoys.”
Construction Timeline and Business Strategy
In an interview with OPIS, Rast indicated that construction is expected to begin within the next year and take approximately 18–20 months, with production commencing toward the end of the decade.
One significant operational challenge lies in the lack of domestic ingot and wafer production capacity.
“There’s not enough ingot and wafer capacity to meet anywhere close to U.S. demand right now,” Rast noted, adding that Highland may adopt the model used by another U.S. producer—exporting polysilicon overseas for wafer and cell production, and re-importing the finished modules or cells for final assembly in the U.S.
“We think there’s a reasonably good chance that we’ll have both domestic demand and some export demand, at least in the near term,” he said.
While declining to elaborate, Rast revealed that discussions have been held regarding a potential “Factory 2” outside the U.S.
Technology Claims and Market Skepticism
In its announcement, Pivotal described Highland as a “next-generation” polysilicon technology developer, citing its patent-protected silicon purification process. Highland claims this method can deliver high-purity polysilicon at 50% lower capital costs, 40% lower operating costs, less than half the electricity usage, and 90% lower carbon emissions compared with conventional methods.
According to the company’s website, the process involves scaling up an aluminum–silicon alloy system, whereby impure raw silicon is smelted with pure aluminum at a lower melting temperature than conventional approaches, resulting in lower energy consumption of 20–40 kilowatt-hours per kg.
Rast told OPIS that, unlike the improved Siemens and fluidized bed reactor or FBR methods, Highland’s “segregation” process uses aluminum as a purifying agent to produce chunk-sized polysilicon comparable in appearance, chemical composition and purity to Siemens-method output. He emphasized that while ingot producers may choose to blend it with other feedstocks, blending is not required for quality reasons.
Despite these claims, several industry insiders have expressed skepticism over whether the process can consistently achieve solar-grade quality. Critics argue that the approach—classified as a “physical method” rather than a chemical process—faces inherent limitations in removing metallic impurities, potentially compromising product purity.
A veteran industry participant with more than a decade of experience in both semiconductor- and solar-grade polysilicon markets told OPIS: “I have not come across any qualified solar-grade ingot manufacturers that rely solely on polysilicon produced by physical methods as feedstock.”
Referring to the long history of the photovoltaic manufacturing industry, the source stressed the importance of empirical validation, adding that initial samples and downstream customer trials will be the critical first step toward market entry. “Securing downstream client endorsement will be essential in determining the project’s commercial viability,” the source said.
Another downstream source pointed out that while Highland emphasizes low production costs, the claimed energy consumption of around 30 kWh/kg would place costs roughly in line with FBR granular polysilicon. The source also cited the unsuccessful attempt by a long-established U.S. producer to restart solar-grade FBR production last year as a cautionary example.
Addressing these concerns, Rast acknowledged: “We run into this pushback all the time.” He told OPIS that Highland had already conducted a large-scale pilot project nearly a decade ago, producing millions of solar cells verified by the U.S. Department of Energy, and has since continued refining the process in preparation for large-scale production.
“Concerns around impurities often focus on boron and phosphorus, but we are well below the maximum allowable levels for both to produce high-quality solar cells and modules for both P- and N-type,” he said. “We recognize that our credibility remains in question because no one has attempted this at the scale we are proposing. However, we believe we have sufficient physical evidence and engineering validation to support our claims.”
“The market is watching closely,” said one observer. “There is no consensus yet. Only once the plant is built, equipment is installed, and trial runs begin will it become clear whether the technology can deliver as promised and whether the company’s output can enter the competitive arena of the non-Chinese polysilicon market, posing direct competition to established producers.”
a Policy Changes Bring Opportunities and Headwinds
Rast acknowledged that recent U.S. policy changes have altered the economics of solar manufacturing. The July passage of a federal budget package accelerates the phase-out of the 48E Investment Tax Credit and its domestic content bonus, reducing the incentives that had spurred record solar capacity additions and demand for U.S.-made modules.
However, the legislation also restricts tax credit eligibility for companies receiving “material assistance” from foreign entities of concern—a provision that could limit imports from suppliers with Chinese ties as early as next year.
Rast pointed to the shifting trade landscape as a potential boost as well. Trade measures, including existing Section 201 and Section 301 tariffs, the ongoing Section 232 investigation into polysilicon imports, and recent U.S. Customs detentions of non-compliant solar cells, may further bolster demand for non-China polysilicon.
“There have been some good things and some challenging things, but overall, we believe demand for an efficient U.S. polysilicon producer remains strong enough for us to proceed,” Rast said.
–Reporting by Colt Shaw, cshaw@opisnet.com and Summer Zhang, szhang@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com