Wind energy components include things like blades and towers. Affected parts in the solar sector include solar panels and charge controllers.
“This credit remains largely intact under both the House and the Senate bill, as compared to some of the other credits that would be completely repealed almost immediately,” Breaks says. “Its purpose is to promote onshoring or also to encourage companies that are already based here in the U.S. to expand or to stay in the U.S. and make these materials.”
Both pieces of draft legislation would also introduce a phase-out for the production of critical minerals, including the likes of lithium and cobalt, both of which are needed to manufacture batteries. And there’d be a rule moving forward that would limit the acquisition of assembly parts, or manufactured parts, made by prohibited foreign entities like China.
The value of the credit amount varies since it’s based on production volumes, but the good news is that there’s no funding cap. And while the credit is geared toward larger entities, smaller companies can also get in on it.
“It’s open for everybody that meets the criteria, you don’t have to be a large company to qualify for it,” says Dean Zerbe, the national managing director at alliant, a business and tax consulting firm. “That said, small and medium-sized companies will need to sharpen their pencils to make sure they can qualify for it and talk to their tax advisors.”
