Background
The Section 45X Advanced Manufacturing Production Tax Credit (AMPTC) and the Domestic Content Bonus provide direct incentives to domestic producers of critical energy and battery production components, including solar components.
The Section 45X AMPTC and the Domestic Content Bonus are foundational for leveling the playing field with China and maintaining an advanced and innovative U.S. solar manufacturing sector. The 45X AMPTC is the main pillar for financing new and innovative American solar manufacturing facilities being built to reduce reliance on Chinese supply chains and drive technological innovation and efficiency. In tandem, the Domestic Content Bonus is critical for driving demand for American-made products and boosting domestic energy manufacturing. Together, these policies support tens of thousands of solar manufacturing workers, with thousands of additional employees expected to be hired to support recent investments.
45X Eligible Solar Components & Credit Values:
- PV wafers: $12 per square meter.
- Thin-film or crystalline PV cells: $0.04 per watt.
- PV modules: $0.07 per watt.
- Polymeric backsheets: $0.40 per sq meter.
- Solar-grade polysilicon: $3 per kilogram.
Domestic Content Bonus Value:
- Projects that meet the domestic content requirements can receive an extra 10% bonus on the ITC or a 10%increase in the PTC rate.
Policy Priorities
Congress should maintain support for the core aim of the 45X AMTPC and Domestic Content Bonus, which is to ensure American energy manufacturing dominance, and further strengthening the tax code by:
- Maintaining the 45X AMPTC for Non-FEOCs, including transferability mechanisms
An early phase out for the 45X AMPTC or elimination of the transferability monetization mechanism would undercut project financing and potentially cause major job losses.
- Eliminating China’s access to the 45X AMPTC
Foreign Entities of Concern (FEOCs) should be disqualified from receiving the 45X AMPTC, ensuring American taxpayer dollars are only accessible to U.S. and allied nation entities.
- Maintaining and Strengthening the Domestic Content Rules
Domestic Content Rules should be expanded and structured to require an increasing percentage of critical components and an elimination of low-value retail products and minimally -assembled products from the calculations.
- Ensuring next-generation technologies benefit from the 45X AMPTC
Technologies like tandem solar and direct wafering represent the promise of the U.S. fully taking back manufacturing technology leadership. Additional clarity in the 45X AMPTC could advance investments in next-gen technologies, ensuring we do not lose the technological race to China
