How the 45X Advanced Manufacturing Tax Credit Impacts Solar Equipment Buyers

Introduction

One of the less publicized but game-changing provisions in the Inflation Reduction Act (IRA) is Section 45X—the Advanced Manufacturing Production Tax Credit. While many clean energy buyers are familiar with the 30% Investment Tax Credit (ITC), 45X offers new incentives further up the supply chain, targeting U.S.-based manufacturers of solar equipment.

So why should installers, developers, and equipment buyers care? Because these upstream incentives are already reshaping equipment pricing, supply chains, and domestic energy strategy in ways that directly impact projects today.

What Is the 45X Tax Credit?

Section 45X provides per-unit tax credits to manufacturers of clean energy components—including solar cells, modules, wafers, inverters, trackers, and battery components—produced and sold in the United States.

For solar, the credit structure includes:

• $0.07 per watt for solar modules

• $0.04 per watt for solar cells

• $3/kg for polysilicon

• $12/m² for wafers

• $0.40 per kilogram for polymer backsheets

• $0.87/kg for structural fasteners

These incentives begin phasing down in 2030 and phase out entirely by 2032—encouraging near-term reshoring and investment.

Who Qualifies for the Credit?

The credits are paid to U.S.-based manufacturers producing eligible components in qualified facilities. These can be new or retrofitted plants, and the credit applies only to products sold to unrelated third parties (i.e., not for internal use).

Key companies already announcing expansions or new domestic factories in response to 45X include:

• First Solar (solar modules)

• Qcells (modules and cells)

• Meyer Burger (modules and wafers)

• Enphase (microinverters)

How It Affects Solar Equipment Prices

Although the tax credit goes to manufacturers, the effects are beginning to trickle downstream to buyers:

• Domestic content is becoming more cost-competitive with imports, especially when factoring in shipping and tariffs.

• Developers can now earn a domestic content bonus (10% additional ITC) if a certain percentage of project components are U.S.-made—creating new demand for eligible equipment.

• This puts upward pressure on U.S. manufacturing capacity—but also offers potential pricing stability compared to volatile overseas supply chains.

Buyers should expect to see more clarity in product origin labeling, new SKUs, and shifting lead times as manufacturers adjust their offerings and prioritize domestic lines.

Why It Matters for Project Developers and Buyers

• Total Cost of Ownership: Projects using 45X-incentivized equipment may qualify for the domestic content bonus, which increases the net tax benefit.

• Procurement Strategy: Builders must assess both availability and compliance documentation when selecting panels, inverters, and BOS components.

• Risk Reduction: U.S.-made components often avoid the uncertainty of international tariffs, trade restrictions, and forced labor enforcement actions.

• ESG Strategy: Buyers prioritizing sustainability and transparency can leverage 45X-backed equipment for stronger environmental claims and social compliance.

Surge’s Perspective: Navigating the Equipment Market

At Surge, we’re seeing a rapid evolution in the sourcing landscape. We help clients:

• Understand which manufacturers qualify for 45X and how that affects pricing

• Match project designs with equipment that qualifies for the domestic content bonus

• Weigh U.S.-made versus imported options based on delivery timelines and overall ROI

• Build supply resilience by aligning with reliable and transparent vendors

Whether your project goals are tax-optimization, ESG alignment, or long-term cost savings, we’re here to decode the new rules and help you act strategically.

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TL;DR Summary

• The 45X Advanced Manufacturing Tax Credit offers per-unit incentives to U.S. manufacturers of solar equipment.

• It aims to boost domestic production of solar modules, cells, wafers, inverters, and more through 2032.

• This reduces price disparities between domestic and imported components and supports supply chain resilience.

• Developers and buyers can benefit via improved availability, pricing stability, and eligibility for domestic content bonus credits.

• Surge helps clients identify and source 45X-eligible equipment to maximize project performance and financial returns.