Congress Takes Aim: New Bill Targets the 45X Tax Credit for Renewables
Attention, America! Representatives John Moolenaar and Jared Golden are shaking things up with a bold new bill that seeks to put the brakes on advanced manufacturing tax credits. But what does this mean for our economy and clean energy future? Let’s dive in!
From pv magazine USA
In a move that’s turning heads across the nation, Congressmen John Moolenaar (R-MI) and Jared Golden (D-ME) have teamed up to introduce bipartisan legislation aimed at curbing the recently finalized U.S. Treasury rule regarding the section 45X advanced manufacturing production tax credit.
The Inflation Reduction Act of 2022 has been a game-changer, offering enticing 45X tax credits for solar components manufactured right here in the USA. These credits have sparked interest from clean energy manufacturers around the globe, eager to set up shop in the States. However, the sight of Chinese companies entering the fray has ignited fierce debate among lawmakers about how to protect American interests and bring the solar supply chain home.
Moolenaar and Golden are raising the alarm over the 45X rule, arguing it could potentially funnel American tax dollars to foreign-owned companies producing battery components — a scenario they deem unacceptable. “America must be a nation of producers, not just consumers,” Golden asserts. “These domestic manufacturing credits are designed to bolster our economy, not subsidize foreign competitors. It’s time for the Biden administration to reevaluate and close the loopholes that benefit adversarial nations.”
In a previous effort, Moolenaar introduced the “No Gotion Act,” aimed specifically at preventing companies from countries like China, Russia, Iran, and North Korea from qualifying for these tax credits. This latest legislation takes it a step further by stopping the 45X credits altogether, ensuring that taxpayer dollars are not funneled into the hands of foreign entities.
Speaking of Gotion, this California-based battery manufacturer is a subsidiary of Gotion High Tech from China and is 25% owned by Volkswagen. They have ambitious plans to invest $2.4 billion in an electric vehicle battery plant near Big Rapids, Michigan. But is this really the direction we want to go as a nation?
Since the passage of the IRA, the U.S. has experienced an unprecedented resurgence in manufacturing and clean energy production. Yet, with that growth comes the critical need to strengthen and localize our supply chains. Michael Carr, executive director of the Solar Energy Manufacturers of America (SEMA) Coalition, expressed concerns, stating, “While we understand the intention behind Moolenaar and Golden’s resolution, the Congressional Review Act could create significant uncertainty for American solar manufacturers and their workforce. The 45X incentives are vital for achieving our energy, economic, and national security objectives.”
American solar manufacturers have invested billions to reduce our reliance on China, cut energy costs, and create thousands of jobs. We need to collaborate with Congress to ensure that these provisions serve U.S. taxpayers while continuing our remarkable progress in solar manufacturing.
If Moolenaar and Golden’s legislation passes through the House, the Senate, and receives the President’s signature within 60 legislative days of the release of the 45X rule, this game-changing rule could be put to rest.
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