The U.S. Treasury Department has expanded the 25% investment tax credit for semiconductor manufacturing to include producers of solar ingots and wafers, key components in photovoltaic panels. This decision broadens the scope of the Advanced Manufacturing Investment Credit under the CHIPS and Science Act to cover not only semiconductor manufacturers but also chip equipment producers.
The regulations clarify that this tax credit applies to advanced manufacturing facilities producing semiconductors, including processes like slicing, etching, and bonding semiconductor-grade polysilicon used in PV modules. Eligible facilities must begin construction before 2027.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, stated, "Treasury’s final rules will create new opportunities for solar manufacturers and encourage the upstream development of the solar supply chain." She added that "supply chain accessibility and security remains one of our biggest challenges in the U.S. solar and storage industry," noting a lack of operational ingot and wafer facilities as a critical gap.
Polysilicon wafers are essential in creating solar cells by acting as semiconductors that generate electrical current. The U.S. currently lacks ingot and wafer production due to manufacturing complexities and specialized equipment needs, making incentives crucial for establishing such operations.
The Treasury Department cited specific supply chain and national security considerations for expanding the tax credit to solar wafer production. Presently, Chinese manufacturers dominate global production of solar panel-making equipment and components like wafers.
In its statement, the Treasury Department highlighted ongoing collaboration with other federal agencies to explore further options aimed at promoting domestic production across the entire solar supply chain.
