The Biden Administration Extends Semiconductor Tax Break to Solar Wafer Producers
In a strategic move to boost domestic solar supply chain, the Biden administration announced on Tuesday an extension of a semiconductor manufacturing tax break to producers of solar wafers, essential for making solar panels, a market primarily dominated by China.
Why This Development Matters
This step is part of the administration’s larger agenda to address climate change and create more jobs. With the introduction of new subsidies for clean energy manufacturing, manufacturers have been ramping up solar panel production. However, there is a growing demand for support for wafer-producing facilities due to their complex manufacturing processes that require substantial investments.
Background
The Treasury Department’s new rules for the 48D advanced manufacturing investment credit, established under the 2022 Chips and Science Act, will now allow solar ingot and wafer makers to claim a 25% tax break for setting up new facilities. These factories are also eligible for a separate manufacturing tax credit under the 2022 Inflation Reduction Act, based on the volume of components produced.
Key Takeaway
“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,” stated Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition.
