PVTIME – On 12 May 2023, the U.S. Department of the Treasury released new guidance that will govern the implementation of the domestic content bonus credit in the Inflation Reduction Act (IRA).
Under the IRA, clean energy developers using the solar Investment Tax Credit (ITC) or Production Tax Credit (PTC) are encouraged 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 ITC and 0.3 ¢/kWh for projects that use the PTC.
Following is a statement from Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA) on the new guidance:
“This highly anticipated guidance from the Treasury Department is an important step forward and will spark a flood of investment in American-made clean energy equipment and components. The U.S. solar and storage industry strongly supports onshoring a domestic clean energy supply chain, and today’s guidance will supplement the manufacturing renaissance that began when the historic Inflation Reduction Act (IRA) passed last summer.
“In just nine months, the IRA has done more for America’s solar manufacturing sector than any program or policy in history. More than $13 billion of new domestic manufacturing investments have been announced to date, and the domestic content bonus credit is a critical piece of the puzzle for driving additional investment and revitalizing communities across the country.
“Importantly, the guidance allows developers to utilize the domestic content bonus credit for projects that begin construction this year, which will speed up the deployment of clean energy in the near-term. As we await additional guidance on other critical IRA provisions, we look forward to analyzing the details from today’s release and providing further input to maximize the impact of this landmark law.”