U.S. lawmakers propose to suspend the 45X manufacturing tax credit, U.S. solar stocks rise broadly
Republican Congressman John Moolenaar from Michigan and Democratic Congressman Jared Golden from Maine submitted a resolution to the House of Representatives proposing to suspend the U.S. 45X Advanced Manufacturing Production Tax Credit (PTC). This news led to a general rise in U.S. solar stocks, with Enphase Energy up 8.4%, Solaredge Technologies up 15.9%, Canadian Solar up 9.7%, and Sunrun up 9.6%. The tax credit policy is intended to encourage domestic clean energy manufacturing, but some lawmakers are concerned that it may benefit foreign companies at the expense of U.S. domestic businesses
According to the Zhitong Finance APP, previously, Republican Congressman John Moolenaar from Michigan and Democratic Congressman Jared Golden from Maine submitted a resolution to the House of Representatives proposing to suspend the U.S. 45X Advanced Manufacturing Production Tax Credit (PTC). Affected by this news, most U.S. solar stocks rose on Monday. Enphase Energy (ENPH.US) rose 8.4%, Solaredge Technologies (SEDG.US) rose 15.9%, Canadian Solar (CSIQ.US) rose 9.7%, Sunrun (RUN.US) rose 9.6%, Sunnova Energy (NOVA.US) rose 9%, Array Technologies (ARRY.US) rose 5.9%, Shoals Technologies (SHLS.US) rose 4.9%, JinkoSolar (JKS.US) rose 4%, and First Solar (FSLR.US) rose 3.4%, while Fluence Energy (FLNC.US) rose 2.1%.
Data shows that the 45X tax credit policy is a key provision in the U.S. Inflation Reduction Act (IRA), aimed at encouraging companies to invest in building clean energy manufacturing facilities domestically, promoting the development of the U.S. clean energy industry. This policy provides tax credit incentives for the production of eligible products such as photovoltaic cells, wafers, polysilicon, back sheets, modules, tracking brackets, and inverters.
Some U.S. lawmakers are concerned that foreign companies, especially those linked to so-called "foreign entities of concern" like China, may benefit from this tax credit policy, thereby harming the interests of domestic companies. They believe this policy could lead to U.S. tax funds flowing abroad without genuinely promoting the development of domestic manufacturing, and thus propose to suspend this tax credit policy to protect the competitiveness of U.S. domestic companies