The United States government offers a range of incentives to promote the construction of solar panel manufacturing plants, aiming to boost domestic production and reduce reliance on foreign technology imports. These incentives are mostly accomplished through tax credits and funding programs designed to support the solar manufacturing supply chain.

Inflation Reduction Act (IRA) of 2022

The most significant federal support comes from the Inflation Reduction Act (IRA) of 2022, which provides substantial tax credits to domestic solar manufacturers. The IRA introduces the Advanced Manufacturing Production Tax Credit under Section 45X, offering a per-unit tax credit for the production of eligible solar components, including photovoltaic cells, wafers, and modules. This performance-based incentive is designed to scale with production volumes, encouraging increased manufacturing output within the U.S. 

Investment Tax Credits (ITC) and Production Tax Credits (PTC)

The IRA also extends Investment Tax Credits (ITC) and Production Tax Credits (PTC) to solar manufacturing facilities. These credits can cover a significant portion of the capital expenditures associated with establishing new manufacturing plants or expanding existing ones.The ITC under Section 48D has been expanded to include solar ingot and wafer production, providing a 30% tax credit for investments in these manufacturing processes. 

Domestic Content Bonus

To incentivise the use of American components, the IRA offers a “domestic content bonus.” Solar projects utilising domestically produced panels, inverters, and other key components may qualify for an additional 10% tax credit. This bonus aims to create demand for U.S.-manufactured solar products, encouraging manufacturers to establish and expand operations within the country. 

Funding Opportunities and Grants

The U.S. Department of Energy (DOE) provides funding opportunities to support solar manufacturing through its Solar Energy Technologies Office (SETO). These programs offer financial assistance for research, development, and demonstration projects to advance solar manufacturing technologies and processes. 

To discuss mega facility construction and the key issues facing the industry, connect with solution providers and network with delegates, attend the Constructing Mega Facilities: Advances in Planning, Design, and Engineering Summit taking place on April 9th and 10th, 2025, in Houston, Texas.

For more information, visit our website or email us at info@innovatrix.eu for the event agenda.