The US Department of the Treasury and the Internal Revenue Service (IRS) have released final rules for the Section 45X Advanced Manufacturing Production Tax Credit, aimed at promoting clean energy technologies such as solar and wind components, batteries, energy storage, and critical minerals.
The final regulations, published on Thursday, align closely with earlier proposals made in December 2023, providing additional clarity intended to bolster clean energy manufacturing in the United States.
Since the enactment of the Inflation Reduction Act over two years ago, the advanced manufacturing production credit has spurred over USD 126 billion (EUR 117 billion) in private sector investments in clean energy manufacturing.
This includes approximately USD 77 billion for battery production, USD 6 billion for critical minerals, USD 19 billion for solar components, and USD 8 billion for wind energy technologies, according to the US Treasury, which cited data from the Rhodium Group/MIT's Clean Investment Monitor.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), highlighted the importance of Section 45X, stating, “Clarity is key, and these rules provide the certainty domestic solar and storage manufacturers need to move forward with their investments.” She also noted SEIA's advocacy for solutions that enhance the credit's accessibility, particularly for inverter manufacturers and storage manufacturers dealing with critical minerals.
Ray Long, president and CEO of the American Council on Renewable Energy (ACORE), emphasized the rule's flexibility, saying it “retains the applicability of direct pay and transferability, and provides needed flexibility for a broad range of US businesses to fully leverage the benefits and create American jobs.”
JC Sandberg, chief advocacy officer of the American Clean Power Association (ACP), remarked that the advanced manufacturing tax credits are catalyzing unprecedented investment levels in US clean energy manufacturing, with the finalization of the 45X regulations offering businesses the certainty necessary to continue building domestic supply chains.
Mike Carr, executive director of the Solar Energy Manufacturers for America (SEMA) Coalition, stated, “The 45X credit is the foundation for reshoring the solar supply chain and has already changed the face of the U.S. solar manufacturing industry. Issuing this final rule takes a critical step forward in providing certainty for investments to build new and restart mothballed solar factories.”
The advanced manufacturing production credit was established by the Inflation Reduction Act of 2022 and is based on production volume.
