The US-made wind and solar components are now cheaper than importing them, according to a recent report by researchers at Dartmouth and Princeton.
The study focused on the estimated impacts of the Inflation Reduction Act (IRA) on the wind and solar industry. The IRA includes clean electricity production and investment tax credits as well as the 45x Advanced Manufacturing Production Tax Credit (45X MPTC).
The 45X MPTC is a tax credit that manufacturers can claim on their federal corporate income taxes for each clean energy component they produce and sell in the US. The credit amount varies depending on the type of component and the number of units produced and sold.
Eligible components include solar panels, inverters, tracking system components, batteries, and certain minerals. The goal of this tax credit is to encourage the production of clean energy components and support the growth of the renewable energy industry in the US.
Manufacturers who use US-made parts and materials for clean energy development while paying workers fair wages will reap significant cost savings due to the investments made through the IRA.
When developers meet the prevailing wage and apprenticeship standards, the cost of producing solar or onshore wind power drops more than 60%.
The report concludes that the new law will induce demand for over 4 million additional solar and wind jobs in 2035. Approximately 3.7 million additional jobs related to utility-scale solar PV and about 0.4 million additional wind-related jobs will be induced compared to projected employment levels if the IRA had not passed.
The report also highlights the impact of using US-made components on demand for materials. It suggests that the IRA will significantly increase demand for US-made aluminum, cement, and steel for use in solar and wind projects.