The US Treasury has announced that solar ingot and wafer manufacturing facilities will qualify for a 25% investment tax credit under the CHIPS and Science Act of 2022. The final rules, issued on Tuesday, clarify that semiconductor wafer production includes wafers used for photovoltaic solar energy generation. Facilities starting construction before the end of 2026 will be eligible for this credit, which can be combined with other relevant tax incentives.
The Solar Energy Industries Association (SEIA) welcomed the clarification, noting that it will support upstream solar supply chain development. Currently, the US has no operational ingot and wafer production. Since the Inflation Reduction Act's passage, there have been announcements for 21 GW of wafer and 10 GW of ingot capacity, but only 3.3 GW is under construction. The Solar Energy Manufacturers for America (SEMA) Coalition also praised the final rules for encouraging solar supply chain reshoring.
“We appreciate the efforts that went into this significant rulemaking and look forward to continuing our work with the Biden-Harris Administration on leveraging other tools, such as the Inflation Reduction Act's domestic content provisions, to support the reshoring of the full solar supply chain,” said SEMA executive director Mike Carr.
Qcells, a subsidiary of Hanwha Solutions, is building a US facility to produce 3.3 GW of ingots, wafers, cells, and solar panels. When completed, the company will produce 8.4 GW of solar panels annually across its Dalton and Cartersville sites. Qcells' $2.5 billion investment in the US solar supply chain will also benefit from the CHIPS tax credit.
Danny O'Brien, president of corporate affairs at Qcells, reacted to the announcement, stating: “The White House is wisely addressing the fact that the overwhelming majority of solar panels manufactured in the world are done so by companies in China. This virtual monopoly of the clean energy supply chain means the US risks missing out on a huge economic opportunity as well as endangering its energy security as the country increasingly relies on solar energy. With the support of the Biden Administration's Inflation Reduction Act, Qcells is working to bring back solar manufacturing to the US and applauds this bold decision.”
