Inflation Reduction Act Could be a Gamechanger for US Solar Industry

The proposed legislation includes a $369.75 billion energy security and climate change program

thumbnail

A legislation proposed in the US called the ‘Inflation Reduction Act of 2022’ to address climate change, taxes, healthcare, and inflation could see a revival of the domestic solar energy manufacturing industry.

The bill, which witnessed a historic agreement between Senate majority leader Chuck Schumer and Senator Joe Manchin, would deliver billions of dollars in taxes and other incentives to U.S. solar manufacturers. It will equip them with government support to compete with Chinese and Canadian solar energy products.

Additionally, the agreement calls for comprehensive permitting reform legislation to be passed before the end of the fiscal year. Permitting reform is essential to unlocking domestic energy and transmission projects, which will lower consumer costs and increase cleaner production.

The bill has proposed $369.75 billion in Energy Security and Climate Change programs over the next ten years. The combined investments in the FY2022 Budget Reconciliation bill would put the U.S. on a path to roughly 40% emissions reduction by 2030 and represent the most significant climate investment in U.S. history.

The bill proposes over $60 billion for onshore clean energy manufacturing in the U.S. across the entire supply chain of clean energy and transportation technologies. These manufacturing incentives will help alleviate inflation and reduce the risk of future price shocks by bringing down the cost of clean energy and clean vehicles and relieving supply chain bottlenecks.

Out of the $369 billion, $30 billion would go into production tax credits to accelerate the domestic solar industry’s manufacture of solar panels, batteries, and critical minerals processing.

A $10 billion investment tax credit is being set aside to build clean technology manufacturing facilities for electric vehicles, wind turbines, and solar panels

The bill proposes providing a range of incentives to consumers to relieve the high energy costs and decrease utility bills. This includes direct consumer incentives to buy energy-efficient and electric appliances, clean vehicles, and rooftop solar, and invest in home energy efficiency, with a significant portion of the funding going to lower-income households and disadvantaged communities.

President Joe Biden has praised the agreement on the bill as “the action the American people have been waiting for.”

The Biden administration has taken several measures to help the domestic solar industry. In June, the government announced a two-year duty exemption of solar modules and cells imported from Cambodia, Malaysia, Thailand, and Vietnam to ensure that the U.S. solar industry has a sufficient supply of components.

The U.S. also agreed to lift safeguard duty on Canadian solar product imports after reaching an agreement at the Free Trade Commission meeting. The duty was imposed in 2018 when Donald Trump was President.

Also, this year, the Department of Energy (DOE) sought public inputs on the structure of a $2.5 billion Transmission Facilitation Program, which seeks to establish a national grid that runs on 100% clean electricity by 2035.

RELATED POSTS

thumbnail
Top 5 States for Open Access Solar Installations in CY 2022

India added an impressive 2.5 GW open access solar capacity in 2022, registering a growth of 92% year-over-year (YoY), according to the 2022 Q4 & Annual Mercom India Solar Open Access Market Report. Karnataka emerged as the to...

March 23, 2023

Markets & Policy

Government Clarifies ALMM Enlistment Guidelines for Co-branded Solar Modules

The Ministry of New and Renewable Energy (MNRE) has modified the Approved List of Models and Manufacturers (ALMM) guidelines and provided exceptions to broaden the qualification criteria for modules produced under agreements betwe...

March 24, 2023

C&I

In Bengaluru, a 100 kW Solar System Can Save C&I Entities ₹1 Million Annually

Mercom India successfully concluded the C&I Clean Energy Meet 2023 in Bengaluru, where stakeholders in the solar sector and commercial and industrial entities converged to enthusiastically discuss the benefits of renewable ene...

March 24, 2023

Other

Gensol Acquires Solar Tracker Maker Scorpius for ₹1.35 Billion

Gensol Engineering, a part of solar engineering, procurement, and construction (EPC) company Gensol Group, has acquired India-based solar tracker manufacturer Scorpius Trackers for ₹1.35 billion ($16.4 million). Gensol said the ac...

March 23, 2023

Magazine

DON'T MISS AN ISSUE!

Mercom Cleantech Magazine

Get Your Copy Today!

magazines

Latest News

thumbnail
Intra-State Sections of Evacuation Infrastructure for Renewables Delayed

The Ministry of New and Renewable Energy (MNRE) told the Parliamentary Standing Committee on Energy that the intra-state stretches of the Green Energy Corridor (GEC) have been delayed due to various reasons, including...

March 24, 2023

thumbnail
EnBW Takes €2.4 Billion Final Investment Decision on Offshore Wind Project

German electric utility company Energie Baden-Wuerttemberg (EnBW) has made its final €2.4 billion (~$2.6 billion) investment decision on He Dreiht, a major wind project in the German North Sea. The project has a capacity of 960...

March 24, 2023

thumbnail
India Missed 2022 Renewables Target as Rooftop Solar and Wind fell Short

The Parliamentary Standing Committee on Energy report has isolated underwhelming progress on rooftop solar and wind energy projects as the primary reason for India falling short of achieving its renewable energy capacity target...

March 24, 2023

thumbnail
Researchers Aim to Accelerate Delivery of Space-Based Solar Power to Earth

Researchers at Northumbria University are studying ways of producing wireless electricity from space to Earth by harvesting the Sun’s energy. U.S.-based aerospace, defense, and information security organization Lockheed Martin...

March 24, 2023

thumbnail
Regulator Directs Wind Energy Firm, MSEDCL, to Recompute Delayed Payment Charge

The Maharashtra Electricity Regulatory Commission (MERC) recently directed Hindustan Petroleum Corporation (HPCL) and the Maharashtra State Electricity Distribution Company (MSEDCL) to recompute the delayed payment charge from...

March 24, 2023

thumbnail
One-Step Coating Could Make Perovskite Solar Cells Commercially Viable

The National Renewable Energy Laboratory (NREL) has devised a new way to produce perovskite solar cells that could speed its commercialization. Different layers are typically added sequentially to a conductive glass substrate to...

March 24, 2023

thumbnail
ACWA Power to Develop Solar and Energy Storage Projects in Uzbekistan

Saudi Arabia-based energy company ACWA Power has signed power purchase and investment agreements with  National Electric Grid of Uzbekistan, and the Ministry of Investment, Industry, and Trade to develop new solar and battery...

March 24, 2023

thumbnail
China Securities Regulatory Commission Approves Canadian Solar’s IPO

The China Securities Regulatory Commission has approved the registration of CSI Solar, the engineering, procurement, and construction arm of solar module maker Canadian Solar, to issue an initial public offering (IPO). The...

March 24, 2023

thumbnail
Renewables Accounted for 83% of the Total Generation Capacity Added in 2022

Renewable capacity grew by 9.6% in 2022, adding a record 295 GW worldwide. This accounts for 83% of all power capacity added last year and brings the global renewable generation capacity to 3,372 GW by the end of last year, a...

March 24, 2023

thumbnail
Government Clarifies ALMM Enlistment Guidelines for Co-branded Solar Modules

The Ministry of New and Renewable Energy (MNRE) has modified the Approved List of Models and Manufacturers (ALMM) guidelines and provided exceptions to broaden the qualification criteria for modules produced under agreements...

March 24, 2023

MORE NEWS