Treasury finalizes rules opening up CHIPS credit to solar manufacturers

By Kelsey Tamborrino | 10/23/2024 06:23 AM EDT

The department said it made the change after coordination with the departments of Commerce and Defense “due to specific supply chain and national security considerations regarding the production of solar wafers not present in the case of other related products.”

Treasury Building.

Treasury Department headquarters in Washington. Patrick Semansky/AP

The Treasury Department finalized new rules Tuesday for an investment tax credit under the CHIPS and Science Act that will allow domestic producers of ingots and wafers used in solar panels to qualify.

The rulemaking comes as the Inflation Reduction Act has launched a wave of announcements for new solar manufacturing plants. But those incentives have so far failed to drive new investments in the U.S. in key parts of the supply dominated by China.

The final guidance Tuesday “provides critical certainty for semiconductor and solar manufacturers to make generational investments in communities across the country,” said National Economic Advisor Lael Brainard in a statement.

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Treasury’s final rules for the advanced manufacturing investment credit created in the CHIPS and Science Act — generally equal to 25 percent — are intended to provide clarity for companies making investments in U.S. semiconductor manufacturing and semiconductor manufacturing equipment.

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