Solar is poised to be the world’s leading source of energy by 2040, but U.S. manufacturers remain imperiled and poorly positioned to capture the high-quality manufacturing jobs of thesolar boom. Now that solar is the fastest growing electricity sector globally and the least expensive choice for new electricity generation, it is time for the U.S. to invest in long-term policy solutions that attract and sustain solar manufacturing. This will create stable, middle-class jobs and prevent the U.S. and its allies from becoming reliant on China to fight climate change and meet renewable energy deployment objectives.
China dominates the solar supply chain and has developed a total monopoly on the solar wafer segment
There are no U.S. wafer or cell producers and U.S. polysilicon makers are denied access to China’s market
U.S. module producers are imperiled by increasing imports and a reliance on imported components
The Solution
A durable, long-term incentive that can spur an explosion in new investment in U.S. manufacturing at every step of the supply chain before it is lost for good. By incentivizing manufacturing directly, we can harness American ingenuity and continue to drive down solar deployment costs while adding good quality jobs across the country.
Domestic solar supply manufacturing tax credit, with each domestically produced component of the supply chain receiving its own per-unit credit. Credit for American manufacturing of:
Modules - Assembly (7 cents/watt) or combined credit for module technology combining all steps (16 ¢/W)
Photovoltaic cells (4 ¢/W)
Photovoltaic wafers ($12/m2 [approx. 5-6 ¢/W])
Solar grade polysilicon ($3/kg [approx. 1 ¢/W])
Solar Tracker Components [Torque Tube/Purlin 87 ¢/kg], [Structural fasteners $2.28/kg]
Structured to make each stage of the supply chain competitive in global markets and give market certainty. Per unit incentives reward innovation, efficiency, and scale; not dollars invested.
Refundable to the manufacturer to enable new entrants and enable larger capital investments
Credit phases out in annually starting January 1, 2029 – incentivizes rapid build out at scale
Can be paired with 48C or other up-front tax or financial incentives to aid in rapidly achieving scale or steering investment to vulnerable communities, without raising WTO issues
