The Biden administration announced on Tuesday an extension of a semiconductor manufacturing tax break to include producers of solar wafers, the thin silicon slices essential for solar panels, which are predominantly manufactured in China. This is the latest step in the administration's efforts to bolster a domestic solar supply chain, a key component of its climate change and economic policy.
Although dozens of solar panel facilities have been announced in the U.S. since 2022, spurred by clean energy subsidies, the solar industry has sought more support for wafer production, which involves more complex and capital-intensive manufacturing processes.
The Treasury Department's updated rules for the 48D advanced manufacturing investment credit, established under the 2022 CHIPS and Science Act, will now allow solar ingot and wafer manufacturers to claim a 25% tax break for new facilities. These producers are also eligible for another tax credit from the 2022 Inflation Reduction Act, which is based on the volume of components produced.
In response to the announcement, Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, said, “The Biden-Harris Administration's efforts will drive significant investment in domestic solar ingot and wafer manufacturing capacity, currently dominated by China, help meet our economic and national security goals, and support thousands of good-paying jobs across the country.”
