President Biden has signed into law the so-called “Inflation Reduction Act of 2022”. While the name as well as the purpose of the bill are controversial across the U.S. political spectrum, the bill does have a number of key elements the renewable energy industry in the U.S. has been hoping and asking for including a $369BN investment in “energy security and climate change”.
But what does this actually mean for the renewable energy industry and why does it matter to your business and you personally?
Here are a few major game changing provisions for both renewable generation and storage industries:
- Introduction of a standalone ITC for energy storage projects
- 10-year extension of the Investment Tax Credit (ITC) and Production Tax Credit (PTC)
- Carbon capture and sequestration tax credits
- Up to $7,500 consumer tax credits for electric vehicles using batteries built in North America
- Various domestic clean energy manufacturing credits for solar panels, trackers, inverters, energy storage incl.:
- 10% cost of production credit for electrode active materials including cathodes, anodes, anode foils, solvents, additives, electrolyte salts)
- $35/kWh credit for battery cells over 12 Wh capacity
- $10/kWh credit for battery modules of 7kWh capacity
- Thin-film or crystalline silicon PV module: 7¢/W(dc)
- Thin-film or crystalline silicon PV cell: 4¢/W(dc)
- Thin-film or polysilicon PV wafer: $12/m2
- Solar-grade polysilicon: $3/kg
- Polymeric backsheet: 40¢/m2
- 10% of production costs for critical minerals
- Transferability of tax credits and carryback period
While the new bill is most definitely a turning point that will create a strong growth in U.S. domestic investment and manufacturing of renewable energy projects and technologies, it includes certain limitations, requirements (e.g. union labor, domestic contents) and tiered incentive structures which require a thorough review of individual project situations and customized approaches. A lot of work ahead for all of us.
Please reach out to us for more information. With over 15 years of experience in renewable energy, we will be happy to provide the right approach and technology for your projects.
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Coatema’s extensive experience in high-tech coating, printing, and laminating for emerging industries and products like batteries, fuel cells, solar, and printed electronics paired with next Machinery Group’s comprehensive customer service orientation is a win-win for both companies striving for long term strategic partnerships with North American customers.