As reported, U.S. Rep. John Moolenaar, Republican of Michigan, and U.S. Rep. Jared Golden, Democrat of Maine, have introduced a resolution to the House of Representatives proposing to suspend the U.S. 45X Advanced Manufacturing Production Tax Credit (PTC).
Background
The 45X tax credit policy is a key provision in the U.S. Inflation Reduction Act (IRA) designed to encourage companies to invest in clean energy manufacturing facilities within the U.S. and promote the development of the U.S. clean energy industry. The policy provides tax credits for the production of eligible PV cells, wafers, polysilicon, backsheets, modules, tracking mounts, inverters and other products.
Reason for the proposal
Some legislators believe there are unfair competition concerns: Some United States legislators are concerned that foreign firms, particularly those with ties to so-called “foreign entities of concern” such as China, may be benefiting from the tax credit to the detriment of United States-based firms. They believe that this policy could lead to a flow of U.S. tax dollars abroad without a real boost to U.S. domestic manufacturing, and have proposed suspending the tax credit to protect the competitiveness of U.S. domestic firms.
Political position and policy adjustment considerations: With the change of the U.S. government and the change of political positions, some newly elected officials may hold different views on the policies pursued by the previous administration, and believe that the existing policies need to be reevaluated and adjusted to better meet their political beliefs and policy objectives . After Trump was elected president, he made clear his opposition to the Inflation Reduction Act enacted by the Biden administration in 2022, and the 45X Advanced Manufacturing Tax Credit, which was part of the Act, may be one of the targets of his policy adjustments.
Impact
If the proposal is passed, it may have a certain impact on the clean energy manufacturing industry in the U.S. The 45X tax credit policy has been a key pillar of the U.S. Inflation Reduction Act in promoting the development of the clean energy industry since its inception. Its coverage is broad, involving photovoltaic cells, wafers, polysilicon, backsheets, components, tracking brackets, inverters and many other clean energy products manufacturing links, 45X tax credit policy in promoting the United States solar energy, energy storage and other clean energy areas of investment and development has played an important role in the suspension of the policy may lead to a number of companies to reduce investment in the U.S. or delay the construction of the project, thus affect the pace and scale of development of the U.S. clean energy industry.
For companies that have planned or are in the process of investing and manufacturing under the 45X tax credit, the suspension may result in increased costs and lower returns on investment, and some companies may need to reevaluate their investment strategies and project planning. Some companies may need to reevaluate their investment strategies and project planning, and foreign companies that had hoped to use the credit to enter the U.S. market or expand their U.S. operations may have to change their investment decisions.
As one of the important clean energy markets in the world, policy changes in the U.S. may also have a chain reaction on the global clean energy market pattern. If the U.S. suspends the 45X tax credit policy, it may affect the layout and adjustment of the global clean energy industry chain, and some enterprises may shift their investment focus to other countries or regions, which will change the competitive situation of the global clean energy market.
Source：https://mp.weixin.qq.com/s/7gOruIUUKZHb9tzJFz8TVA