U.S. solar manufacturers are urging the Biden administration to enforce stricter rules on the 2022 Inflation Reduction Act to ensure meaningful use of domestic materials.
U.S. Solar Manufacturers Urge Biden Administration to Enforce Meaningful Use of Domestic Materials in Renewable Energy Projects
U.S. solar manufacturers are asking the Biden administration to make stricter rules for a law that gives a 10% tax credit to solar project developers who use American-made materials. The 2022 Inflation Reduction Act wants to increase investment in clean energy and reduce reliance on Chinese products by requiring that 40% of a developer’s material costs come from U.S.-made solar products. But the Solar Energy Manufacturers for America Coalition (SEMA) says developers are meeting this requirement by buying U.S.-made mounting racks and inverters while still importing solar panels which goes against the law’s purpose, according to the report of Benzinga.
(photo: Bloomberg)
U.S. Solar Industry Reacts to New Rules: Stock Prices Plummet Amid Concerns Over Competitiveness
SEMA believes this loophole does not help the administration’s goal of creating a strong domestic solar supply chain to compete with China. Making solar panels in the U.S. is more difficult and expensive than making other components like mounting racks and inverters. By allowing developers to use these easier-to-make components to meet the 40% requirement and the law does not encourage the production of U.S.-made solar panels, which are crucial for a competitive and independent solar industry.
These concerns have affected the stock market with solar panel manufacturers seeing a decline by late-morning trading on Wednesday. Enphase Energy, Inc. dropped 4.36% to $111.10, while Brookfield Renewable Partners L.P. and Sunrun Inc. fell by 2.78% and 2.49% respectively. Exchange-traded funds that include shares of Enphase, like Invesco Solar ETF and Global X Solar ETF, also declined. This shows that the market is worried about the future competitiveness of U.S. solar manufacturing under the current rules.
