The Solar Energy Manufacturers for America Coalition (SEMA) has proposed restricting Chinese companies from accessing clean energy tax credits, including the 45X battery subsidy. This announcement was made on the social media platform X.
The Section 45X Advanced Manufacturing Production Credit is a federal incentive program designed to support domestic production of clean energy components. It is projected to disburse over $30 billion through 2031. According to the Congressional Research Service, there are concerns that firms linked to China could receive a substantial portion of these credits if foreign entity restrictions are not clearly defined. The credit includes per-unit rates for items such as battery cells and solar wafers.
According to SEMA, loopholes in the Inflation Reduction Act might allow Chinese firms to benefit from U.S. clean energy tax credits. In public comments and policy advocacy, they have urged the Biden administration to strengthen Foreign Entity of Concern (FEOC) provisions and expand domestic content requirements to better support U.S. solar manufacturers. The coalition says robust enforcement is necessary to prevent subsidizing adversarial foreign supply chains through programs like the Section 45X tax credit.
As reported by SEMA, the U.S. Department of the Treasury and the Department of Energy issued proposed guidance in December 2023 regarding FEOC rules for clean energy tax credits. These agencies said that companies with 25% or more ownership or board control by a designated foreign government may be excluded from Inflation Reduction Act incentives beginning in 2024. Compliance will involve self-certification from participants and oversight from federal auditors.
The SEMA Industry Coalition advocates for U.S. manufacturing and supply chain resilience, particularly in response to foreign dominance in critical sectors like rare earth elements and advanced technologies. The coalition unites aftermarket and performance parts manufacturers to support policies that reinforce domestic capabilities and restrict foreign entities of concern from accessing federal clean energy incentives. It serves as a policy and advocacy platform focused on protecting national security and economic competitiveness, according to their website.
