US Senators have introduced a new bill to keep Chinese manufacturers away from accessing Section 45X tax credits
They want the Internal Revenue Code of 1986 to be amended to ensure foreign entities of concern do not get any benefits
First Solar has lent its support to the bipartisan bill saying it will give a level-playing field to the US manufacturing industry
A new bipartisan bill titled American Tax Dollars for American Solar Manufacturing Act has been introduced by 4 US Senators who want Chinese PV manufacturers to access 45X Advanced Manufacturing Tax Credits under the Inflation Reduction Act (IRA).
According to the proposed legislation, the Section 45X(d) of the Internal Revenue Code of 1986 must be amended by adding a new paragraph that specifically prohibits credit for components produced by foreign entities of concern.
Section 45X credits cover the use of solar modules, cells, wafers, solar grade polysilicon, torque tubes, structural fasteners or polymeric backsheets, along with solar trackers, produced within the US for solar projects (see US Guidance On Clean Energy Manufacturing Credits).
The bill has been introduced by Democratic Senators Jon Ossoff from Georgia and Sherrod Brown from Ohio, and Republican Senators Bill Cassidy from Louisiana and Rick Scott from Florida, the legislation will further strengthen American energy independence and solar manufacturing.
“We cannot allow American tax dollars to go to Chinese companies that cheat and undermine American solar manufacturing. Our bipartisan bill will make sure that only American companies are supported by taxpayer dollars, and support the creation of manufacturing jobs throughout the solar supply chain across Ohio,” said Brown.
Mark Widmar, the CEO of US-based solar module manufacturer First Solar, lent his support to the bill saying, “It is imperative that the US solar manufacturing industry, which should not be confused with companies simply assembling modules in the US with high-value-add imported components, is granted a level playing field allowing it to compete on its own merits.” First Solar has a major industrial base in Brown’s constituency Ohio.
Since the launch of the IRA, several Chinese manufacturers have announced plans to manufacture within the US. Ningbo Boway Alloy Materials’ US solar presence Boviet (USA) will invest in a 2 GW TOPCon solar cell and module capacity each.
LONGi is collaborating with Invenergy for a 5 GW US module fab. Even Trinasolar has zeroed in on Texas for its 5 GW solar factory plans. These are some of the names among many others.
“It is critical that Congress close the loophole that allows Chinese companies—which are already subsidized by the CCP and are violating U.S. trade law—to be eligible for IRA tax credits. Congress must ensure that American taxpayers' dollars are used to strengthen our own industrial base, not to subsidize our greatest geopolitical and military threat,” added the CEO of the Coalition for a Prosperous America (CPA), Michael Stumo.
Ossoff has been vocal about using trade measures against Chinese firms to protect the US solar manufacturing industry, including eliminating Section 201 tariff exemption for bifacial modules and increasing tariffs on Chinese-made solar components under Section 301.