FLINT—Congressman Dan Kildee (MI-08), member of the House Ways and Means Committee, today addressed a letter with other members of Congress calling on the U.S. Treasury Department to issue rules for new solar energy tax credits that will support American manufacturing jobs and reduce America's dependence on the People's Republic of China for solar components.
In 2022, Congressman Kildee helped passes the Inflation Reduction Law to support new U.S. manufacturing jobs and help reduce costs for Michiganders. This new law included several Kildee priorities, including new tax credits to support the production and installation of solar panels in the United States.
These tax credits include an additional credit (a domestic content bonus) for solar projects that use American-made parts and materials. The Domestic Content Bond was intended to support manufacturing jobs in the United States, including the production of Michigan-made polysilicon, a critical component of solar panels. However, current interim rules would allow solar projects using polysilicon and Chinese-made wafers to qualify for the Domestic Content Bonus, undermining the goal of offshoring more of the solar manufacturing process.
To ensure that the Domestic Content Bond creates jobs in the US manufacturing sector and reduces our dependence on China, Congressman Kildee's letter calls on the US Department of the Treasury to issue rules that address these gaps and support entire US solar manufacturing supply chain
In addition to Kildee, the letter was signed by representatives Danny Davis (IL-07), Debbie Dingell (MI-06), John Garamendi (CA-08), Marcy Kaptur (OH-09), Frank Mrvan (IN-01) . , Linda Sánchez (CA-38), Hillary Scholten (MI-03), Elissa Slotkin (MI-07) and Haley Stevens (MI-11).
"Thank you to Congressman Kildee for leading this important call for stronger domestic content bonus guidance to protect American solar manufacturing jobs," said Mike Carr, executive director of the Coalition of Manufacturers of Solar Energy. Solar Energy for the United States. "US solar manufacturers are facing serious headwinds right now." “But with measures to ensure that American solar manufacturers, not those in China, benefit from this tax credit, the Biden administration can deliver a complete American solar supply chain here at home.”
Below is the full text of the letter:
Secretary Yellen:
We urge the U.S. Department of the Treasury (Treasury) to issue revised guidance and promulgate regulations on the Domestic Content Bonus for solar installations under the Inflation Reduction Act (IRA) to better support solar manufacturing The USA.
Thanks to the IRA, there have been announcements of significant domestic investments in solar panel manufacturing, but those new investments are not achieving significant consolidation of the solar supply chain. Since the Treasury released domestic content bonus guidance, the U.S. imported a record number of foreign-made solar panels in the third quarter of 2023, according to S&P Global Market Intelligence. As such, we believe the May 12, 2023 guidance does not meet Congressional intent and request revisions.
We request that the guidance be updated to allow U.S.-made solar-grade polysilicon and wafer production to count toward the Domestic Content Bonus to attract significant investment to the U.S. from abroad. This is critical because China currently controls nearly 100 percent of global solar wafer production and nearly 80 percent of solar-grade polysilicon production. However, current guidance allows solar-grade polysilicon and wafers from China or Chinese-controlled supply chains to count toward the Domestic Content Bonus as component parts higher up in the production chain. As a result, it fails to meaningfully address China's control over the solar value chain and will keep the United States dependent on China for essential solar components.
Congress intended the Domestic Content Bonus to provide additional support for American-made solar production and reduce our dependence on China. The current Treasury guidance is equivalent to claiming that an apple pie is American if it is baked in the United States, but the apples and all the other ingredients are from China. Concerns about overdependence on China are not hyperbole. In recent months, China has imposed controls on exports of critical minerals and graphite, emphasizing the need to diversify our supply chains, from start to finish.
Treasury must move quickly on this guidance to support American manufacturing. Additionally, ratepayers and solar developers, especially for residential solar projects, should have the information necessary to choose components eligible for the National Content Bonus at the time of purchase. This includes requiring that local content be calculated by technology in a project. This will provide the clarity needed to reduce uncertainty, prevent fraud, inform purchasing, and better support American solar manufacturing.
In conclusion, future updates to domestic content bonuses should incentivize American solar manufacturing across the supply chain by improving these “Buy America” gaps. This will provide a much-needed signal to domestic solar manufacturers that they can rely on a strong market for their products. Thank you for your leadership and consideration.
Daniel T. Kildee
Juan Garamendi
Linda Sanchez
Hillary J. Scholten
marcy hood
frank j. Srvan
Danny Davis
Elisa slotkin
Debbie Dingell
Haley Stevens
