Companies are starting to produce more solar panels in the US, such as this panel from manufacturer Canadian Solar, which was unveiled at the RE+ Renewable Energy Conference in Las Vegas in September 2023. Presented at the conference.
Buying American-made products not only supports American jobs. Depending on what you buy, this could also save you money.
The federal Inflation Relief Act passed last year provides significant tax breaks for American-made technologies that help in the clean energy transition.
But if government rules regarding tax credits make it difficult to find American-made electric vehicles, then finding American-made solar panels could be even more challenging.
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“There really aren’t that many [made in the U.S.] solar panels,” said Tom McCalmont, CEO of Paired Power, which makes solar charging stations for cars. “The reality is that almost all panels are manufactured overseas.”
Most solar panels are made in China. Chinese companies produced 78% of the world’s solar cells in 2019, according to a Bloomberg New Energy Finance report. “This ratio is even higher when calculated by plant location rather than by company headquarters location.”
That could change in the coming years as tax incentives for purchasing domestically produced panels and tariffs on foreign competitors will incentivize U.S. companies. Currently, there are few options for American-made solar panels.
Firstly, when purchasing any solar panel, tax benefits are provided, amounting to 30% of the cost of the system. The incentive, known as the Clean Energy Home Credit, was expanded and extended under the Inflation Relief Act. The program will end in 2035 unless Congress renews it.
But if your solar panels are manufactured in the United States, the government will provide an additional 10% tax credit. U.S. Treasury guidance states that products will qualify if all steel production processes occur in the United States and a minimum percentage of the costs of producing the products and components is attributable to products and components mined, produced, or manufactured in the United States. Get a bonus. USA.
Abigail Ross Hopper, president and CEO of the Solar Energy Industry Association, said in the report that the requirement “will spur significant investment in U.S.-made clean energy equipment and components,” which will exceed $13 billion announced to date. . statement.
“The U.S. solar and energy storage industry strongly supports the domestic clean energy supply chain, and today’s guidance will complement the resurgence in production that began last summer following the passage of the landmark Inflation Reduction Act (IRA),” she said.
Most solar panels are made in China, but a growing number are made in the United States, like this one at the Qcells plant in Dalton, Georgia. The new tax credit aims to encourage more solar energy companies to make modules in the United States.
Most of the world’s solar panels are made in China. The country’s experience in manufacturing has allowed the quality and cost of panels to improve over time. So, the main reason to buy American-made panels now is to support American industry and potentially receive additional tax benefits.
Most consumers prefer to work with solar installers when considering installing solar panels on their home. Typically installers only offer one or two options from their manufacturing partners. Consumers interested in purchasing American-made panels should ask their local installer about the brand, where it was made, and the brand’s reputation. Also, always shop around to get the best price.
While government incentives provided by the Inflation Relief Act are being rolled out throughout the industry, consumers should expect to have only a few U.S. solar manufacturers to choose from.
”The IRA has helped – it’s been instrumental in bringing manufacturing back to the U.S.,” McCalmont said. “Our industry is happy about it. It’s not that we all like buying panels from China, it’s just the reality of where we are.”
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Post time: Dec-05-2023