The Unites States Department of Treasury has issued final rules on the CHIPS Act of 2022, designating that solar ingot and wafer production qualifies for the 48D investment tax credit (ITC).
Conventional silicon solar panel manufacturing begins with the mining and refinement of raw polysilicon. The polysilicon is then made into polysilicon ingots, which are then sliced into thin photovoltaic wafers. These wafers are then manufactured as cells and integrated into a frame as a final solar panel (known as a module). While later, downstream stages like module manufacturing had been supported by the Inflation Reduction Act, earlier and more expensive upstream processes lacked incentives.
Since the Inflation Reduction Act passed, there have been 21 gigawatts of wafer announcements and 10 gigawatts of ingot announcements but only 3.3 GW of ingot and wafer capacity is under construction, according to the Solar Energy Industries Association (SEIA).
Now, silicon ingot and wafer manufacturing is supported by a 25% ITC. The section 48D investment tax credit is available for facilities that begin construction before 2027 and does not preclude facilities from qualifying for other applicable tax credits.
“Supply chain accessibility and security remains one of our biggest challenges in the U.S. solar and storage industry. While the United States is a global leader in module manufacturing, we don’t have any ingot and wafer facilities in operation yet, representing a critical gap in the solar supply chain,” said Abigail Ross Hopper, president and chief executive officer, SEIA.
“Treasury’s final rules will create new opportunities for solar manufacturers and encourage the upstream development of the solar supply chain,” said Hopper.
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