(PRESS RELEASE) Washington, DC – Congresswoman Marcy Kaptur (OH-09), Ranking Member of the House Appropriations Subcommittee on Energy and Water Development released the following statement following a decision by the Biden Administration and Treasury Department to allow Chinese made solar subcomponents to be used in solar technology billed as American made.
The Treasury Department, in guidance issued on last Friday, said that solar project developers will qualify for a 10% additional “domestic content” bonus tax credit for using solar panels manufactured in the United States, even if the solar panels incorporate silicon wafers imported from foreign countries.
A report issued by the International Energy Agency (IEA) published in July 2022 found that China accounted for 97% of global silicon wafer production.
“I have long fought for American energy manufacturing and an all of the above energy strategy that moves us toward energy independence, but it is hard to understand this decision by the Biden Administration that seeks to reward those who offshore jobs in China and elsewhere,” said Congresswoman Marcy Kaptur.
“The Administration must not allow China to undercut domestic manufacturers and the workers who power them with our own tax code.”
“This new interpretation of the ‘domestic content’ bonus established as part of the Inflation Reduction Act rewards those who cut corners, offshore jobs, and buy cheaper components produced in China.”
“When a product is given the benefit of being called American made, that should include all stages and steps in the production process.”
“Giving this additional tax benefit to those who cut corners is yet another reward for bad behavior.”
“We welcome Treasury’s support for the growth of domestic manufacturing in the solar industry. However, the allowance for overseas made goods such as polysilicon wafers to continue to flood the domestic market and still count as U.S.-manufactured components is a big miss for promoting American manufacturing jobs and addressing climate change.”
“The Adjusted Percentage Rule in the guidance allows for a Frankenstein-approach to picking and choosing how to meet U.S. manufacturing requirements that sidesteps the Inflation Reduction Act’s requirements that all components are to be manufactured in the America.”
“This action leaves the door open for continued significant manipulation of the domestic content thresholds to do as little manufacturing in the U.S. as possible,” said Aaron Bates, CEO of Toledo Solar.
“Toledo Solar supports a solar industry that has an end-to-end supply chain here in the U.S., and with leadership from Congresswoman Kaptur, and others, we hope that Treasury will strongly enforce domestic content and forced labor rules.”
This follows Congresswoman Kaptur’s vote last month, for a resolution disapproving the Biden Administration’s 2-year suspension of critical market-leveling import tariffs on companies that illegally circumvent U.S. trade laws by funneling solar cells and modules manufactured in the People’s Republic of China through four Southeast Asian countries.
Due to heavy government subsidies, forced labor, and cheap coal, solar cells and modules manufactured in the People’s Republic of China (PRC) can be dumped on the U.S. market at artificially low prices.
The U.S. imposes tariffs on the import of these products to protect American manufacturers from grossly unfair competition.
In December, after a months-long investigation, the U.S. Department of Commerce (Commerce) announced it had preliminarily determined that four companies are circumventing these tariffs by moving solar cells and modules manufactured in the PRC through four Southeast Asian countries.
By suspending tariffs on solar cells and modules from Southeast Asia, the Biden Administration has given the PRC a pass to flagrantly flout U.S. trade laws, undercut American manufacturers, and harm American workers.
As Ranking Member of the Energy and Water Subcommittee, Congresswoman Kaptur is a champion for American-made solar and has oversight over funding the Department of Energy.
Last month, Congresswoman Kaptur announced that the Department of Energy has awarded $16.1 Million to the Toledo area to spur jobs and solar energy innovation.
As part of this award, Toledo Solar will receive $8.8 Million to demonstrate the application of semitransparent cadmium telluride (CdTe) solar panels to windows, addressing a new market for thin-film solar devices, while First Solar will receive $7.3 Million for a project that will develop a tandem module combining CdTe and silicon that is more efficient than silicon or thin-film modules on the market today.