The Biden administration’s rules, announced on Friday, which determine which companies and manufacturers can benefit from the new solar industry tax credit, came from the US-based solar product makers, who said the guidelines were in place. has been criticized as not enough to bring manufacturing back from China. .
The rule stems from President Biden’s broad clean energy bill, which would encourage the construction of solar power plants in the United States and send clean energy products to China needed to mitigate climate change. provide a combination of tax credits and other incentives aimed at reducing the dependence of change.
In guidance released Friday, the Treasury Department said it would impose a 10% additional tax on facilities that assemble solar panels in the United States, even if the silicon wafers used to make the panels are imported from abroad. said to offer a deduction. Under the Biden administration’s new climate change bill, solar and wind farms can apply for a 30% tax credit on installation costs.
Government officials told reporters on Thursday they were looking to take a balanced approach that leaned toward forcing supply chains to return to the United States. However, China’s dominance in the global photovoltaic industry encourages the manufacturing of US photovoltaic products while ensuring a plentiful supply of low-cost solar panels to reduce carbon emissions. It creates a difficult calculation for the Biden administration to think.
Officials said the Biden administration has room to change the rules if U.S. supply chains are strengthened.
“American workers and businesses will continue to benefit from President Biden’s investment policy in the United States, as domestic content bonuses under the Control Inflation Act will boost U.S. manufacturing, including steel,” Treasury Secretary Janet L. Yellen said in a statement. receive,” he said. “These tax credits are key to driving investment and ensuring that all Americans share in the growth of the clean energy economy.”
Critics said the new rules were not enough to give companies incentives to move their solar supply chains out of China.
Mike Carr, executive director of the Alliance of Solar Energy Manufacturers of America, which includes solar companies with operations in the United States such as Hemlock Semiconductor, Wacker-Chemie, Kewsels and First Solar, called the move a “domestic It is a missed opportunity to build a photovoltaic manufacturing supply chain.” ”
“The simple fact is that today’s announcement is likely to reduce planned investments in key areas of solar cell wafer, ingot and polysilicon production,” he said in a statement. “China produces 97 percent of the world’s solar wafers and has substantial control over both polysilicon and cell production. We are concerned that the control of
The Biden administration has set an ambitious goal of generating 100 percent of the country’s electricity from carbon-free sources by 2035, which could require: . More than double the annual pace A solar power generation facility.
The US still relies heavily on Chinese manufacturers for low-cost solar modules. Although there are many factories with Chinese capital, These products are now manufactured in Vietnam, Malaysia and Thailand.
China also supplies many of the key components of solar panels, including more than 80 percent of the world’s polysilicon, which most solar panels use to absorb energy from the sun. And a significant portion of China’s polysilicon comes from the Xinjiang Uighur Autonomous Region, where the US government has banned imports over concerns about forced labor.
Other companies in the solar supply chain that rely on imported components were more positive about the Treasury’s guidance.
Abigail Ross Hopper, chief executive officer of the Solar Energy Industry Association, said the guidance was an important step forward that “will drive massive investment in clean energy equipment and components made in the United States.”
“The U.S. solar and storage industry is a strong supporter of domestic clean energy supply chains, and today’s guidance follows the path of the manufacturing sector, which began last summer with the passage of the historic Inflation Control Act,” he said. It will complement the renaissance of the
Republicans in Congress have already targeted the Biden administration’s climate bill, which has failed to set strict guidelines for manufacturing in China, threatening to pour federal money into Chinese-owned companies set up in the United States. claims to be.
The Biden administration is also spending money to foster the semiconductor and electric vehicle battery industries. The funding guidelines include restricted access to so-called foreign companies of concern, such as Chinese-owned companies. But the anti-inflation law contains no guardrails against the flow of federal dollars into the U.S. operations of Chinese solar companies.
During a congressional hearing on April 25, Rep. Jason Smith, chairman of the House Ways and Means Committee, noted that Chinese-owned manufacturing company JinkoSolar’s Florida facility is eligible for a federal tax credit.
A fact sheet released by Smith states that “works at the factory will involve robots installing arrays of solar cells, which are primarily sourced from China, into solar panel bases.”
Mr. Biden has also clashed with domestic solar producers over another trade lawsuit imposing tariffs on solar products imported from Chinese companies based in Southeast Asia.
Mr. Biden’s decision to waive tariffs for two years enraged Republicans and some Democrats in Congress, saying U.S.-based manufacturers deserve more protection. In recent weeks, both houses of Congress have approved measures to reverse the president’s decisions, which Biden is expected to veto.