US Photovoltaic Subsidy Policy: A Double Standard and a Threat to Global Industry Development

On September 14, the China Photovoltaic Industry Association issued a document stating that photovoltaics are an important product to promote energy structure adjustment and industrial green transformation. However, the United States has built a high protectionist wall, adopted multiple trade restrictions, and set up photovoltaic tariff barriers, while also providing large-scale subsidies to its domestic photovoltaic industry.

US Inflation Reduction Act: Huge Subsidies for Photovoltaic Manufacturing and Installation

The Inflation Reduction Act introduced by the United States in 2022 provides subsidies of up to US$369 billion to support investment and production in the clean energy industry, including domestic photovoltaic products. The act provides tax credit subsidies to photovoltaic companies based on the investment amount or the specifications of the output products.

Photovoltaic Product Manufacturing

The total amount of investment tax credits is as high as $10 billion, covering photovoltaic and other clean energy manufacturing projects, and the credit ratio can be up to 30% of the project investment amount. Production tax credits cover photovoltaic raw materials, cells, components, and related supporting products.

Photovoltaic Power Generation Projects

The US Inflation Reduction Act provides four main tax credit policies for domestic photovoltaic power generation projects. If the project meets the “domestic content” requirements, it will receive additional tax credits. “Domestic content” means that the project uses a certain proportion of steel, iron, or manufactured products mined, produced, or manufactured in the United States.

Household Photovoltaic Applications

The Biden administration announced the “Solar for All” plan, which is an important part of the $27 billion “Greenhouse Gas Reduction Fund” in the Inflation Reduction Act. The plan aims to provide $7 billion in grants to subsidize residential rooftop and community distributed solar projects to reduce the cost of installing and using solar energy.

US Funding for Photovoltaic Technology Research and Development

The US Department of Energy’s Solar Energy Technologies Office (SETO) sets up a funding program every year to provide direct funding for photovoltaic research and development and demonstration projects. On May 16, 2024, the US Department of Energy announced an investment of $71 million to fund the “Crystalline Silicon Photovoltaic Manufacturing and Dual-Use Photovoltaic Technology Incubator Funding Program” and the “Advancing American Thin-Film Solar Photovoltaic Technology Funding Program”.

Local Subsidy Measures for the Photovoltaic Industry

The US states and local governments have introduced numerous subsidy measures to support the development of the photovoltaic industry. The DSIRE database contains a total of 419 fiscal incentives for the photovoltaic industry and its technology development at the state level in the US.

US Photovoltaic Subsidy Policy: A Double Standard and a Threat to Global Industry Development

The US photovoltaic subsidy policy, represented by the Inflation Reduction Act, disregards multilateral economic and trade rules and uses US domestic goods rather than imported goods as a condition for obtaining subsidies. It is a blatant discriminatory policy that violates the obligation of “national treatment”.

According to statistics from US consulting firm Wood Mackenzie, based on currently announced plans, the US photovoltaic module production capacity will exceed 120GW in 2026, which is three times the domestic photovoltaic installed capacity demand by then. This will lead to “overcapacity” in the US photovoltaic industry, impacting the healthy development of the global photovoltaic industry.