Solar could supply more than 40% of the nation's electricity by 2035 - up from 3% today - if Congress adopts policies like tax credits for renewable energy projects and component factories, according to a memo published on Tuesday by the Department of Energy.

The memo is part of a push by the White House to pump up solar as a jobs engine and pivotal pillar in the climate change agenda of President Joe Biden.

The sector is also taking center stage as officials plug the administration's legislative priorities on the road, with Labor Secretary Marty Walsh touring a new First Solar Inc facility in Ohio on Tuesday that is expected to create about 500 jobs.

To propel solar to nearly half of U.S. generation, the industry needs to grow at three or four times its current rate, creating up to 1.5 million jobs, according to an unpublished analysis by the National Renewable Energy Laboratory cited in the memo.

The study supports Biden's argument that a transition away from fossil fuels can create millions of good-paying union jobs while countering climate change. He has a goal to shift the U.S. power sector away from fossil fuels by 2035.

The $1 trillion infrastructure plan approved by the U.S. Senate last week is expected to support solar through investments in modernizing the electricity grid. But the White House is zeroing in on tax credits and a clean electricity payment program for utilities - which may be included in a separate $3.5 trillion spending package - to supercharge industry growth.

"It really is the clean energy tax credits that are going to be drivers for production and for the manufacturing sector," Gina McCarthy, White House climate advisor, said in an interview.

Solar projects are currently eligible for a 26% tax credit that is in the process of being phased out. Biden has pushed for a 10-year extension, as well as new incentives for manufacturing solar components.

Though the memo outlines the sector's potential to create jobs, it notes that solar has "room to improve" in creating union jobs. Solar also lags several other energy sectors in wages, according to some studies.

(Reporting by Nichola Groom; Editing by Michael Perry) ((nichola.groom@thomsonreuters.com;))