Marcy Kaptur

02/27/2024 | Press release | Distributed by Public on 02/27/2024 13:16

Kaptur, Kildee Lead New Effort to Support US Solar Manufacturing JobsPress ReleaseTradeJobs and the EconomyEnergy

Toledo, OH - February 26th, Congresswoman Marcy Kaptur (OH-09) joined Congressman Dan Kildee (MI-08) in a letter with other Members of Congress calling on the US Department of Treasury 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.

"I have long fought for American energy manufacturing and an all of the above energy strategy that moves us toward energy independence. It is hard to understand decisions made by the Biden Administration that seek to reward those who offshore jobs in China and elsewhere," said Congresswoman Marcy Kaptur. "The Administration must not allow China to undercut domestic manufacturers and the workers who power them with our own tax code. We must ensure that the 'domestic content' bonus established as part of the Inflation Reduction Act doesn't reward those who cut corners, offshore jobs, and buy cheaper components produced in China. When a product is given the benefit of being called American made, that should include all stages and steps in the production process. Giving an additional tax benefit to those who cut corners is yet another reward for bad behavior."

In 2022, Congressman Kaptur helped pass the Inflation Reduction Act to support new US manufacturing jobs and help lower costs for Ohioans. This new law included several Kaptur priorities, including new tax credits to support American solar panel production and installation.

These tax credits include a bonus credit-a Domestic Content Bonus-for solar projects that use parts and materials that are made in America. The Domestic Content Bonus was intended to support US manufacturing jobs, including in the production of polysilicon and polysilicon wafers, critical components in solar photovoltaics. However, current interim rules would allow solar projects that use Chinese-made polysilicon and wafers to qualify for the Domestic Content Bonus, undermining the goal of onshoring more of the solar manufacturing process and undercutting Ohio's cadmium telluride photovoltaic manufacturers.

To ensure the Domestic Content Bonus creates US manufacturing jobs and reduces our reliance on China, the Members' letter calls on the US Department of Treasury to issue rules that address these gaps and support the entire US solar manufacturing supply chain.

In addition to Kaptur and Kildee, the letter was signed by Representatives Danny Davis (IL-07), Debbie Dingell (MI-06), John Garamendi (CA-08), Frank Mrvan (IN-01), Linda Sánchez (CA-38), Hillary Scholten (MI-03), Elissa Slotkin (MI-07) and Haley Stevens (MI-11).

"American solar manufacturers are facing severe headwinds right now, but with action to make sure that US solar manufacturers, not China's, benefit from this tax credit the Biden administration can deliver a complete US solar supply chain here at home," said Mike Carr, Executive Director of the Solar Energy Manufacturers for America Coalition.

Below is the full text of the letter:

Secretary Yellen:

We urge the U.S. Treasury Department (Treasury) to issue revised guidance and promulgate a rulemaking on the Domestic Content Bonus for solar facilities under the Inflation Reduction Act (IRA) to better support U.S. solar manufacturing.
Thanks to the IRA, there have been announcements of significant domestic solar panel manufacturing investments, but those new investments are not meaningfully onshoring the solar supply chain. Since Treasury released the Domestic Content Bonus guidance, the U.S. imported a record number of foreign-made solar panels in of the third quarter of 2023, according to S&P Global Market Intelligence. As such, we believe the May 12, 2023, guidance falls short of congressional intent and ask for revisions.

We request updating the guidance to allow American-made solar-grade polysilicon and wafer production to count toward the Domestic Content Bonus to bring meaningful investment to the U.S. from overseas. This is critical because China currently controls nearly 100 percent of global solar wafer production and almost 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 parts of components higher up the production chain. As a result, it fails to meaningfully address China's chokehold on the solar value chain and will cause the U.S. to remain dependent on China for essential solar components.

Congress intended for the Domestic Content Bonus to provide additional support for American made solar production and reduce our dependence on China. Treasury's current guidance is the equivalent of claiming an apple pie is American if the pie is baked in the U.S., but the apples and all other ingredients are from China. Concerns with being over reliant on China are not hyperbole. In recent months, China has placed export controls on critical minerals and graphite, emphasizing the need to diversify our supply chains, from beginning to end.

Treasury must expeditiously move forward on this guidance to support American manufacturing. Further, taxpayers and solar developers, especially for residential solar projects, must have the necessary information to choose components eligible for the Domestic Content Bonus at the time of purchase. This includes requiring that domestic content be calculated by technology in a project. This will provide needed clarity to reduce uncertainty, prevent fraud, inform purchasing, and better support American solar manufacturing.

In conclusion, future Domestic Content Bonus updates must incentivize U.S. 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 robust marketplace for their products. Thank you for your leadership and consideration.

Daniel T. Kildee

John Garamendi

Linda Sánchez

Hillary J. Scholten

Marcy Kaptur

Frank J. Mrvan

Danny K. Davis

Elissa Slotkin

Debbie Dingell

Haley M. Stevens

# # #