The "Reducing Inflation Act" accelerates the pace of development of the US photovoltaic tracking bracket manufacturing industry

The "Reducing Inflation Act" accelerates the pace of development of the US photovoltaic tracking bracket manufacturing industry

The U.S. photovoltaic tracker manufacturing industry will accelerate due to the passage of the Lower Inflation Act, which will provide tracker manufacturing tax credits. The federal spending plan will provide tax credits to manufacturers of torque tubes and structural fasteners produced in the United States.

Ed McKiernan, president of Terrasmart Inc., a U.S. maker of tracking mounts and electronic balancing systems, said receiving the manufacturing tax credit will prompt manufacturers of photovoltaic tracking mounts that have shifted production of torque tubes or structural fasteners overseas to bring their operations back home. One might see PV systems using tracking mounts become more cost-competitive compared to PV systems employing fixed tilt mounts.

The Reducing Inflation Act provides manufacturing tax credits for tracking mounts (fixed-tilt mounts are not included), since tracking mounts are the predominant mounting structure used in large or utility-scale PV projects in the United States. In similar projects, a PV system with tracking mounts produces more energy than a PV system with fixed tilt mounts.

The manufacturing tax credit will provide track bracket manufacturers with a credit of $0.87/kg for torque tubes and $2.28/kg for structural fasteners. Both parts are usually made of steel.

Gary Schuster, CEO of U.S. track mount manufacturer OMCO Solar, said: "Considering that the Reducing Inflation Act provides manufacturing tax credits for track mounts, how to measure the benefits can be a challenge. And the manufacturing tax credit is obtained through torque tube weight. It is very logical because this is a production metric to track stents."

The torque tube is the rotating part of the track bracket and carries the weight of the PV module and its track. Structural fasteners serve many purposes. They connect the torque tubes together and connect the mechanical and drive systems to the photovoltaic tracking mounts. Terrasmart estimates that structural fasteners account for about 10% to 15% of the tracking bracket cost.

While not eligible for the manufacturing tax credit provided by the Reduce Inflation Act, ground-mounted fixed-tilt PV mounts and other PV accessories are still eligible for an Investment Tax Credit (ITC). A 10% "domestic content" tax credit is available for PV systems that use more than 40% locally manufactured PV modules. There is also a 40% tax credit for PV systems if the PV project meets the apprenticeship and prevailing wage requirements.

Manufacturers say the fixed-tilt brackets are primarily made of steel, and the domestic content credit only requires that the steel components be made in the United States.

McKiernan said they have to set a threshold for the domestic content of PV projects, and in many cases, PV system developers achieve this by using locally produced PV modules and inverters, although there are domestic alternatives, but the volume of these products Limited, and supply will outstrip demand for years to come. We hope that customers will pay attention to the localization of mechanical and electrical balance systems, so that they can meet the requirements of domestic content.

The U.S. Department of the Treasury is seeking input on the implementation and delivery of the clean energy tax incentives in the Lower Inflation Act. Many users still have questions about the specifics of prevailing wage requirements, product eligibility for tax credits, and the details of the overall timeline for the Reducing Inflation Act.

Eric Goodwin, director of business development at OMCO Solar, said that the most important thing is not only the guidance on the definition of domestic content, but also the timing of installing PV projects. Many customers have questions: When can I get the credit and apply? Is it the first quarter of next year? Is it January 1, 2013? Will it have retroactive effect? ​​Many customers ask us to define the tracking bracket, But that has to be confirmed by the U.S. Treasury Department.