US offers tax incentives to solar manufacturers that use semiconductors

The Biden Administration announced on Tuesday that it would extend an incentive to manufacturers of thin silicon wafers used in solar panels, which are mostly produced in China.

Why it's important

This is part of the administration's climate change and job agenda to create a domestic supply chain for solar energy.

Thanks to the new subsidies for clean-energy manufacturing, manufacturers have announced dozens solar panel manufacturing facilities by 2022. However, the industry is calling for greater support for wafer production facilities that require more complex manufacturing processes and larger investments.

CONTEXT

New rules from the Treasury Department for the 48D advanced Manufacturing Investment Credit created by the 2022 Chips and Science Act allow solar ingot and wax makers to claim 25% off for new facilities. These factories can also claim a manufacturing tax credit created under the 2022 Inflation Reduction Act, based on how many components they produce.

KEY QUOTE

In a press release, Mike Carr, Executive Director of the Solar Energy Manufacturers for America Coalition said that the Biden-Harris administration's efforts would drive significant investment into domestic solar ingots and wafers manufacturing capacity. This will help us meet our national security and economic goals and support thousands good-paying job opportunities across the nation. Reporting by Nichola groom, Editing by Richard Chang

(source: Reuters)