Dartmouth and Princeton researchers conducted a study, funded by the BlueGreen Alliance, to examine the effect of Inflation Reduction Act. The impact of tax credits and 45X MPTC on clean electricity production was also analyzed. The results revealed positive outcomes that 100% US-made or assembled solar panels are now 30% cheaper than imported goods. Plus, the cost reduction in onshore and offshore wind turbine components has also been noticed. The study suggests, these developments could possibly result in the creation of additional 4 million jobs in the solar and wind sectors.
Recently, Dartmouth and Princeton researchers released a study, “Effects of Renewable Energy Provisions of the Inflation Reduction Act on Technology Costs, Materials Demand, and Labor.†It was funded by the BlueGreen Alliance, an initiative that unites environmental organizations and labor unions. From the results, it is pretty clear now US-made wind and solar components are cheaper than imports.
The topic for examination of the report was the estimated impact of the Inflation Reduction Act on the United States solar and wind industries. The report specifically studies how the Inflation Reduction Act’s 45X Advanced Manufacturing Production Tax Credit (45X MPTC) and the tax credits for clean electricity production and investment affect things.
The Positive Impact
According to the research, with the 45X MPTC the solar panels that are assembled and made from 100% US-based components are now 30% cheaper than imported goods, resulting in cost effective wind and solar components.
This is the first time that US-made offshore and onshore wind turbine components are going to be cheaper than such imported components. This includes turbine blades, nacelles, and towers.
To get the complete clean electricity tax credits, developers must pay the prevailing wage to workers and use a specific percentage of registered apprentices. Meeting this requirement can truly be worth it. The production cost of solar or onshore wind power has dropped by over 60% (and offshore wind power by 20%). Thus, researchers considered that an additional 4 million wind and solar jobs would be created.
Understand 45X MPTC
It provides tax credits for each of the US-made clean energy components like PV modules and its parts, certain critical minerals, and batteries. The United States Department of Energy explains, “The credit varies by eligible component and is multiplied by the number of units produced by the taxpayer that were sold that year.â€
Manufacturers can either make a direct payment from the IRS or they can apply it as a credit to taxes owned. And with US-based renewable resources cheaper than imports now transition from traditional to renewable seems easier than before.
