US Treasury Updates Domestic Content Bonus Guidelines To Boost Local Solar Manufacturing

Recently, the US Treasury Department released the latest domestic content bonus guidelines for clean power production and investment tax credits under the Inflation Reduction Act (IRA), emphasizing the importance of locally manufactured solar silicon wafers in photovoltaic projects. The new guidelines update the domestic content safe harbor guidelines released in May 2024, helping developers assess eligibility for domestic content bonuses due to the use of local production equipment.

The new guidelines have optimized the default values to better match the characteristics and costs of relevant project components and manufactured product components in the market, and have specifically set up optional alternative cost percentages for project developers using locally produced silicon wafers for solar cell manufacturing. This adjustment aims to recognize the cost differences in domestic silicon wafer production and encourage more developers to choose locally produced photovoltaic modules. Meanwhile, the updated safe harbor table has optimized the cost percentages and definitions for projects such as solar energy, onshore wind power, and battery energy storage systems (BESS), providing clearer definitions. In addition, the new guidelines provide additional instructions for renovation projects, projects that adopt optional or direct payment, as well as carport and floating photovoltaic projects, applicable to projects that commence within 90 days after the release of further guidelines.

Deputy Secretary of the Treasury Wally Adeyemo stated that the release of these guidelines will further promote clean energy investment and manufacturing prosperity in the United States, creating more high-quality job opportunities for economic development. Mike Carr, Executive Director of the American Solar Manufacturers Association (SEMA), affirmed the new guidelines but also pointed out that there is still room for improvement. He believes that although the new guidelines recognize the value of domestic silicon wafer production, their complex policies may limit the rapid expansion of the domestic photovoltaic supply chain and fail to fully leverage the technological advantages of the United States.

On the other hand, Danny O'Brien, Corporate Affairs President of Qcells, a solar photovoltaic manufacturer, welcomed the new guidelines. He praised President Biden's leadership in promoting domestic clean energy manufacturing and pointed out that Qcells has created over 4000 manufacturing jobs with the support of the Inflation Reduction Act, demonstrating the effectiveness of the clean energy reindustrialization policy.