In a move designed to provide clarity, the U.S. Treasury Department has announced the parameters for solar energy project tax credits.
“These tax credits are key to driving investment and ensuring all Americans share in the growth of the clean energy economy,” Janet Yellen, the Secretary of the Treasury, said in announcing the official guidance.
Under that guidance, developers can qualify for subsidies that are made with American-made products. But in what some analysts say is a nod to the realities of today’s solar industry, such projects will be eligible for a tax credit even if they use solar panels cells made up of Chinese materials.
Industry leaders have pushed for the exemption, noting the abundance of materials that are imported for such projects from China.
The Treasury Department guidance, months in the making and developed in partnership with the Departments of Energy and Transportation, will apply only to facilities using steel and iron produced in the U.S.
Solar production has greatly accelerated in the U.S. since the passage last year of the Inflation Reduction Act, with offers tax credits worth billions of dollars for projects designed to accelerate the decarbonization of power.
The tax credit, said Energy Secretary Jennifer Granholm, is of a piece with a larger effort “strengthening American manufacturing and enhancing our national security products stamped ‘Made in the U.S.A.’”
The new rules are being regarded by many in the industry as something of a compromise. Notes the publication CleanTechnica: “While America would love to break China’s stranglehold on solar cell manufacturing, it can’t afford to wait for domestic supplies to become available.”
By Garry Boulard
