26 U.S.C. § 45X — Advanced manufacturing production credit

(a) In general. (1) Allowance of credit: You get a credit for each "eligible component" that you both produced and, during the tax year, sold to an unrelated person. (2) Production and sale must be in trade or business: A component only counts if making and selling it was part of your trade or business. (3) Unrelated person: (A) If you sell a component to a related company that then sells it to an unrelated person, you're treated as having sold it to that unrelated person. (B) Election: You can choose to treat a sale to a related person as a sale to an unrelated person, but before you can make that choice, the Secretary may require you to register or provide information, to prevent duplication, fraud, or excessive credit claims. (b) Credit amount. (1) In general — the credit for each eligible component (including components built into it) is: - Thin film or crystalline photovoltaic cell: 4 cents times the cell's capacity, measured in DC watts. - Photovoltaic wafer: $12 per square meter. - Solar grade polysilicon: $3 per kilogram. - Polymeric backsheet: 40 cents per square meter. - Solar module: 7 cents times the module's capacity, in DC watts. - Wind energy component: if it's a "related offshore wind vessel," 10 percent of its sale price. Otherwise, the "applicable amount" for that type of component (set in (2)(A)) times the total rated capacity, in watts, of the wind turbine the component is built for. - Torque tube: 87 cents per kilogram. - Structural fastener: $2.28 per kilogram. - Inverter: the "applicable amount" for that type of inverter (set in (2)(B)) times the inverter's capacity, in AC watts. - Electrode active materials: 10 percent of what it cost the taxpayer to produce them. - Battery cell: $35 times the cell's capacity in kilowatt-hours (subject to the cap in (4)). - Battery module: $10 per kilowatt-hour of capacity — or $45 per kilowatt-hour if the module doesn't use battery cells at all — subject to the cap in (4). - Applicable critical mineral: 10 percent of the taxpayer's production cost (2.5 percent for metallurgical coal). (2) Applicable amounts: (A) For wind components: blade, 2 cents; nacelle, 5 cents; tower, 3 cents; offshore wind foundation on a fixed platform, 2 cents, or on a floating platform, 4 cents. (B) For inverters: central inverter, 0.25 cents; utility inverter, 1.5 cents; commercial inverter, 2 cents; residential inverter, 6.5 cents; microinverter or distributed wind inverter, 11 cents. (3) Phase out and termination: (A)-(B) For components sold after December 31, 2029, multiply the credit by a phase-out percentage: 75 percent for 2030 sales, 50 percent for 2031, 25 percent for 2032, and 0 percent for anything sold after 2032. (C) Applicable critical minerals other than metallurgical coal have their own, later phase-out: for minerals produced after December 31, 2030, the percentage is 75 percent in 2031, 50 percent in 2032, 25 percent in 2033, and 0 percent after 2033. (D) The credit for wind energy components ends entirely — it doesn't apply to components produced and sold after December 31, 2027. (E) The credit for metallurgical coal ends for coal produced after December 31, 2029. (4) Limit on battery cell and module capacity: (A) The capacity counted for a battery cell or module cannot reflect more than a 100-to-1 ratio of capacity to power. (B) That "capacity-to-power ratio" compares the cell's or module's energy capacity to its maximum discharge amount. (c) Definitions. (1) Eligible component: (A) Any solar energy component, wind energy component, one of the listed inverter types, qualifying battery component, or applicable critical mineral. (B) It does not include a part made at a facility if that facility's cost was already counted toward the separate section 48C credit, for property placed in service after this section became law. (C) It also does not include any part that includes "material assistance" from a "prohibited foreign entity" (as defined in section 7701(a)(52)), using a 2027 cutoff date in place of that definition's usual 2030 date. (2) Inverters: (A) An "inverter" is an end product that converts direct-current electricity from one or more solar modules or wind systems into alternating-current electricity. The specific types are: (B) Central inverter — for large utility-scale systems, with capacity over 1,000 kilowatts (AC). (C) Commercial inverter — for commercial or utility-scale use, with a rated output of 208, 480, 600, or 800-volt three-phase power, and a capacity between 20 and 125 kilowatts (AC). (D) Distributed wind inverter — used with a "certified distributed wind energy system" (a wind system certified to the American Wind Energy Association's Standard 9.1-2009, or a later approved revision of it), with a rated output no more than 150 kilowatts. (E) Microinverter — connects to a single solar module, with a rated output of 120/240-volt single-phase or 208/480-volt three-phase power, and a capacity no more than 650 watts (AC). (F) Residential inverter — for a home, with a rated output of 120 or 240-volt single-phase power, and a capacity no more than 20 kilowatts (AC). (G) Utility inverter — for commercial or utility-scale systems, with a rated output of at least 600-volt three-phase power, and a capacity between 125 and 1,000 kilowatts (AC). (3) Solar energy component: This means solar modules, photovoltaic cells, photovoltaic wafers, solar grade polysilicon, torque tubes or structural fasteners, and polymeric backsheets. Related definitions: Photovoltaic cell — the smallest semiconductor piece of a module that directly converts light into electricity. Photovoltaic wafer — a thin slice, sheet, or layer of semiconductor material at least 240 square centimeters in size, made by a single manufacturer either directly from molten or evaporated solar-grade polysilicon (or a deposited thin-film layer) or by slicing an ingot formed from molten polysilicon, and that forms the base of one or more photovoltaic cells. Polymeric backsheet — the sheet on the back of a solar module that insulates it electrically and protects its inner parts from the environment. Solar grade polysilicon — silicon suitable for photovoltaic manufacturing, purified to at least 99.999999 percent purity by mass. Solar module — photovoltaic cells connected and sealed into one weatherproof final unit that's ready to generate electricity in sunlight and be installed without any further manufacturing. Solar tracker — a mechanical system that moves solar modules to follow the sun and increase energy output. Solar tracker components: Torque tube — a structural steel support element (which can include longitudinal purlins) that is part of a solar tracker, can be any cross-section shape, may be assembled from separate segments, spans between foundation posts, supports and connects to the solar panels, and is rotated by a drive system. Structural fastener — a part used to connect a tracker's mechanical and drive components to its foundation, to connect torque tubes to drive assemblies, or to connect torque tube segments to each other. (4) Wind energy component: This means blades, nacelles, towers, offshore wind foundations, and related offshore wind vessels. Related definitions: Blade — the airfoil-shaped blade that converts wind energy into slow rotation. Offshore wind foundation — the part (including the transition piece) that anchors an offshore wind tower and its above-water turbine parts to the seafloor, using either fixed platforms (like monopiles, jackets, or gravity-based foundations) or floating platforms with mooring systems. Nacelle — the housing on top of the tower that holds the drivetrain and other tower-top parts (not counting the blades or the hub). Related offshore wind vessel — a vessel purpose-built or retrofitted for developing, transporting, installing, operating, or maintaining offshore wind components. Tower — the tube-shaped or lattice structure that supports the nacelle and rotor. (5) Qualifying battery component: This means electrode active materials, battery cells, and battery modules. Related definitions: Electrode active material — cathode materials, anode materials, anode foils, and other electrochemically active materials (including solvents, additives, and electrolyte salts) that make the battery's energy storage work. Battery cell — an electrochemical cell with at least one positive and one negative electrode, an energy density of at least 100 watt-hours per liter, and the ability to store at least 12 watt-hours of energy. Battery module — a module that either uses two or more battery cells wired together (in series or parallel) or uses no battery cells at all; that has a total capacity of at least 7 kilowatt-hours (or at least 1 kilowatt-hour, for a module built for a hydrogen fuel cell vehicle); and that includes all the other essential equipment the battery needs to work, such as current collector assemblies and voltage sense harnesses. (6) Applicable critical minerals: Each mineral on this list only counts if it's processed to the listed purity or converted to the listed form: - Aluminum — converted from bauxite to at least 99 percent alumina, or purified to at least 99.9 percent aluminum. - Antimony — converted to antimony trisulfide concentrate of at least 90 percent purity, or purified to at least 99.65 percent antimony. - Barite — purified barium sulfate, at least 80 percent barite by mass. - Beryllium — converted to copper-beryllium master alloy, or purified to at least 99 percent beryllium. - Cerium — converted to cerium oxide of at least 99.9 percent purity, or purified to at least 99 percent cerium. - Cesium — converted to cesium formate or cesium carbonate, or purified to at least 99 percent cesium. - Chromium — converted to ferrochromium of at least 60 percent chromium, or purified to at least 99 percent chromium. - Cobalt — converted to cobalt sulfate, or purified to at least 99.6 percent cobalt. - Dysprosium — converted to dysprosium-iron alloy of at least 99 percent purity, or purified to at least 99 percent dysprosium. - Europium — converted to europium oxide of at least 99.9 percent purity, or purified to at least 99 percent europium. - Fluorspar — converted or purified to at least 97 percent calcium fluoride, or purified to at least 99 percent fluorspar. - Gadolinium — converted to gadolinium oxide of at least 99.9 percent purity, or purified to at least 99 percent gadolinium. - Germanium — converted to germanium tetrachloride, or purified to at least 99.99 percent germanium. - Graphite — purified to at least 99.9 percent graphitic carbon. - Indium — converted to indium tin oxide, or to indium oxide of at least 99.9 percent purity, or purified to at least 99 percent indium. - Lithium — converted to lithium carbonate or lithium hydroxide, or purified to at least 99.9 percent lithium. - Manganese — converted to manganese sulphate, or purified to at least 99.7 percent manganese. - Metallurgical coal — coal suitable for steelmaking (as defined by a specific Department of Energy notice), no matter whether the steel is actually made inside or outside the United States. - Neodymium — converted to neodymium-praseodymium oxide of at least 99 percent purity, or to neodymium oxide of at least 99.5 percent purity, or purified to at least 99.9 percent neodymium. - Nickel — converted to nickel sulphate, or purified to at least 99 percent nickel. - Niobium — converted to ferronibium, or purified to at least 99 percent niobium. - Tellurium — converted to cadmium telluride, or purified to at least 99 percent tellurium. - Tin — purified to low-alpha-emitting tin, over 99.99 percent pure by mass, with an alpha emission rate no higher than 0.01 counts per hour per square centimeter. - Tungsten — converted to ammonium paratungstate or ferrotungsten. - Vanadium — converted to ferrovanadium or vanadium pentoxide. - Yttrium — converted to yttrium oxide of at least 99.999 percent purity, or purified to at least 99.9 percent yttrium. - Other minerals — a further list of 25 minerals (arsenic, bismuth, erbium, gallium, hafnium, holmium, iridium, lanthanum, lutetium, magnesium, palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, terbium, thulium, titanium, ytterbium, zinc, and zirconium) each count once purified to at least 99 percent by mass. (d) Special rules. (1) Related persons: People or companies count as related if they'd be treated as a single employer under the regulations for section 52(b). (2) Only U.S. production counts: A sale only counts under this section if the eligible component was produced within the United States or a U.S. possession. (3) Pass-through for estates and trusts: Rules like those under section 52(d) apply. The statute's text labels two separate rules both as paragraph "(4)": Sale of integrated components — if your eligible component gets built into another eligible component that is then sold to an unrelated person, you're treated as having sold your own component to an unrelated person. Restrictions relating to prohibited foreign entities — (A) No credit under (a) for any tax year if the taxpayer is a "specified foreign entity" or a "foreign-influenced entity" (as defined in section 7701(a)(51)). (B) If a taxpayer counts as a foreign-influenced entity only because of the "effective control" test in section 7701(a)(51)(D)(i)(II), the credit is denied only as it relates to an eligible component described in (c)(1) for that year.