In a significant move to bolster the domestic solar supply chain, the Biden administration announced on Tuesday the extension of semiconductor manufacturing tax breaks to producers of solar wafers—thin silicon slices crucial for solar panel production, which are predominantly manufactured in China.
This initiative aligns with the administration’s broader climate change and job creation agenda. Since 2022, manufacturers have launched numerous solar panel facilities, fueled by new subsidies aimed at clean energy manufacturing. However, the industry has emphasized the need for additional support for wafer production facilities, which involve more complex manufacturing processes and require substantial investment.
The Treasury Department’s updated rules for the 48D advanced manufacturing investment credit, established by the 2022 Chips and Science Act, will enable solar ingot and wafer manufacturers to claim a 25% tax credit for new facilities. Additionally, these factories will qualify for a separate manufacturing tax credit introduced by the 2022 Inflation Reduction Act, based on their production output.
Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, commented, “The Biden-Harris Administration’s efforts will drive significant investment in domestic solar ingot and wafer manufacturing capacity, currently dominated by China, help meet our economic and national security goals, and support thousands of good-paying jobs across the country.”
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