For the first time in US history, US-made wind and solar components are now cheaper than imports, according to a new study.
US-made wind and solar
Dartmouth and Princeton researchers just released a study called, “Effects of Renewable Energy Provisions of the Inflation Reduction Act on Technology Costs, Materials Demand, and Labor” that was funded by the BlueGreen Alliance, which unites labor unions and environmental organizations.
The report examines the estimated impacts the Inflation Reduction Act will have on the US wind and solar industries. Specifically, the report analyzes the impacts of the Inflation Reduction Act’s 45X Advanced Manufacturing Production Tax Credit (45X MPTC), as well as the clean electricity production and investment tax credits.
What is the 45X MPTC?
45X MPTC provides tax credits for each US-made clean energy component, such as the PV module and some of its parts, batteries, and certain critical minerals.
Until 2030, the tax credit will be 75% of the full unit (apart from critical minerals, which don’t phase out). The example the US Department of Energy gives is as follows: a PV panel is 7 cents/Wdc. Multiply that by 75%, and it’s worth a 5.25 cents/Wdc tax credit.
Manufacturers can either opt for a direct payment from the IRS or apply it as a credit to taxes owed.
The positive impact
The researchers found that as a result of the 45X MPTC alone, the cost of solar panels both assembled in the US and made from 100% US-made components are now 30% cheaper than imported solar panels.
US-made onshore and offshore wind components such as towers, turbine blades, and nacelles will also be cheaper than imported components for the first time.
In order to receive the full clean electricity tax credits, developers have to pay workers a prevailing wage and use a certain percentage of registered apprentices. If they meet this requirement, it really pays off: The cost of producing solar or onshore wind falls more than 60% (and offshore wind falls 20%).
As a result, researchers found that an additional 4 million solar and wind jobs will be created.
Read more: The US solar market is projected to triple in size by 2028
Photo: First Solar
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