Some Democrats are pushing back on guidance from the Biden administration that they argue is too lenient in allowing Chinese-made components to be included in solar panels that get tax benefits under the Inflation Reduction Act.
Sens. Joe Manchin (D-W.Va.) and Ron Wyden (D-Ore.) and Rep. Marcy Kaptur (D-Ohio) have all released statements in recent days criticizing the guidance released Friday by the administration.
The Inflation Reduction Act allows certain solar panel projects to qualify for an additional bonus tax credit if a portion of their components — as well as all of their steel and iron — are made in the U.S.
But Manchin and Kaptur say the Treasury Department’s guidance allows people to pocket the tax credit when a substantial amount of their product comes from China. They say it could bolster Chinese manufacturers at the expense of domestic producers.
“This new interpretation of the ‘domestic content’ bonus established as part of the Inflation Reduction Act rewards those who cut corners, offshore jobs, and buy cheaper components produced in China,” Kaptur said in a written statement.
Manchin, who has recently pushed back on the Biden administration on a number of energy-related issues, described the interpretation as part of a larger pattern.
“This is yet another example of the Biden Administration manipulating the law to push their radical climate agenda at the expense of American energy security,” he said in a written statement.
Wyden, who chairs the Senate Finance Committee and is often aligned with the Biden administration, also said the rules “do not go far enough” to rebuild domestic solar manufacturing and said he would “look for any opportunity to push these domestic content requirements further.”
A spokesperson for Kaptur particularly pointed to provisions that say a project’s components would be considered American-made if it is put together in the U.S. regardless of where its subcomponents come from. The spokesperson said this could enable solar projects whose panels have Chinese-made parts, including polysilicon wafers, to get the credit.
Asked about the pushback, Treasury spokesperson Ashley Schapitl highlighted the domestic content credit’s potential to bolster U.S. manufacturing generally.
“The domestic content bonus in the Inflation Reduction Act will boost American manufacturing, including iron and steel, so American workers and American companies benefit from the growth of the clean energy economy,” Schapitl said in a written statement.
“The Inflation Reduction Act includes a range of demand and supply side incentives to drive clean energy development and build the U.S. industrial base, including significant direct incentives for manufacturers to produce solar components in the United States. This suite of incentives are driving a manufacturing boom in the United States,” she added.
This is not the first time Manchin has pushed back on the Biden administration’s interpretation of the law he helped get across the finish line. He has also raised concerns it was too generous with electric vehicle credits that have price caps and mineral sourcing requirements.
Manchin, Wyden and Kaptur also all voted against the Biden administration’s pause on tariffs for some solar imports.
— Updated May 16 at 12:18 p.m.