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Solar Energy Industries Association Responds to Treasury Department's Guidance on Domestic Content Provisions

Strategic Insights

— 2 min read

The US Department of the Treasury has released new guidance on the implementation of the domestic content bonus credit in the Inflation Reduction Act (IRA), a move that is expected to spark a significant investment in American-made clean energy equipment and components. According to Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), this guidance is a crucial step forward and will contribute to the growth of the US solar and storage industry. In the past nine months, the IRA has led to over $13 billion in new domestic manufacturing investments, and the domestic content bonus credit is seen as a vital component in driving additional investment and revitalizing communities across the country.

Key Takeaways:

  • The new guidance from the Treasury Department will govern the implementation of the domestic content bonus credit in the Inflation Reduction Act (IRA), encouraging clean energy developers to build projects using inputs produced in the United States.
  • The domestic content bonus credit is valued at up to 10% for projects that use the Solar Investment Tax Credit (ITC) and 0.3 cents/kWh for projects that use the Production Tax Credit (PTC).
  • The guidance allows developers to utilize the domestic content bonus credit for projects that begin construction this year, speeding up the deployment of clean energy in the near-term.
  • The Solar Energy Industries Association (SEIA) strongly supports onshoring a domestic clean energy supply chain, with Abigail Ross Hopper stating that the guidance will spark a flood of investment in American-made clean energy equipment and components.
  • The Inflation Reduction Act (IRA) has led to over $13 billion of new domestic manufacturing investments in the US solar manufacturing sector in the past nine months.
  • The domestic content bonus credit is seen as a critical piece of the puzzle for driving additional investment and revitalizing communities across the country.

Statistics:

  • $13 billion: the amount of new domestic manufacturing investments announced in the US solar manufacturing sector in the past nine months.
  • 10%: the maximum value of the domestic content bonus credit for projects that use the Solar Investment Tax Credit (ITC).
  • 0.3 cents/kWh: the value of the domestic content bonus credit for projects that use the Production Tax Credit (PTC).
  • Nine months: the time period in which the Inflation Reduction Act (IRA) has led to over $13 billion of new domestic manufacturing investments in the US solar manufacturing sector.

Sources:

  • "Solar and Storage Industry Responds to Treasury Dept. Guidance on Domestic Content Provisions" by the Solar Energy Industries Association, dated May 12, 2023.
  • The Solar Energy Industries Association is a national trade association of the US solar and solar storage industries.

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