(Reuters) – The Biden administration said on Tuesday it would extend a semiconductor manufacturing tax credit to makers of solar wafers, thin slices of silicon used to make solar panels produced mainly in China.
WHY IT’S IMPORTANT
The move is the government’s latest attempt to build a domestic solar supply chain as part of its climate change and jobs agenda.
Manufacturers have announced dozens of solar panel facilities since 2022, thanks to new subsidies for clean energy production, but the industry has called for more support for wafer production facilities with more complex production processes that require larger investments.
CONTEXT
The Treasury Department’s new rules for the 48D Advanced Manufacturing Investment Credit, created by the Chips and Science Act of 2022, will allow manufacturers of solar blocks and wafers to claim a 25% tax credit for new facilities. These factories are also eligible for a separate manufacturing tax credit, created by the Inflation Reduction Act 2022, based on the number of components produced.
IMPORTANT QUOTE
“The Biden-Harris Administration’s efforts will lead to significant investments in domestic solar and wafer manufacturing capacity, currently dominated by China, will help achieve our economic and national security goals and create thousands of good-paying jobs across the country support,” says Mike Carr. executive director of the Solar Energy Manufacturers for America Coalition, in a statement.
