Section 13502 of the IRA inserts a new section 45X into the IRC, providing a tax credit for U.S.-made wind, solar, and battery power components produced and sold after December 31, 2022, known as the Advanced Manufacturing Production Credit.
To qualify for the credit, an eligible component must be produced and sold in the trade or business of the taxpayer. An eligible component is defined as any solar energy component, any wind energy component, an inverter, any qualifying battery, and any applicable critical mineral.
The applicable critical minerals include aluminum, antimony, barite, beryllium, cerium, cesium, chromium, cobalt, dysprosium, europium, fluorspar, gadolinium, germanium, graphite, indium, lithium, manganese, neodymium, nickel, niobium, tellurium, tin, tungsten, vanadium, and yttrium, among others.
The credit ranges from $0.25 to $45, depending on the type of eligible component, cost of production, and capacity factors.
This credit shall apply annually to eligible components produced and sold after December 31, 2022. After December 31, 2029, the credit shall be multiplied by phase-out percentages, specifically, 75% for 2030, 50% for 2031, 25% for 2032, and 0% for 2033. The phase-out percentages will not apply to applicable critical minerals.