The implementation of the new tax credit policy in the United States has brought new development opportunities to the tracking system

The newly passed Inflation Reduction Act (IRA) in the United States will provide tax credits for the manufacturing of solar tracker components, which is bound to boost the growth of domestic solar tracker manufacturing activities in the country. The federal spending bill will provide tax credits for manufacturers of torque tubes and structural fasteners produced domestically in the United States.

"For tracker manufacturers that have moved the production of torque tubes or structural fasteners overseas, I think these manufacturing tax credits will prompt them to return to domestic production," said Ed McKiernan, president of Terrasmart. He further pointed out: "With this change, end customers - the owners and operators of photovoltaic arrays - will be able to purchase at more competitive prices." Compared with fixed brackets, the price of trackers will be more advantageous."

The IRA Act particularly emphasizes tracker systems (rather than fixed brackets), as trackers are the main solar structure in large-scale projects or ground-mounted photovoltaic projects in the United States. Within the same project footprint, solar trackers can generate more energy than fixed-tilt systems because their brackets can rotate around the clock, keeping the components always facing the sun.

According to the bill:

• Torque tubes are eligible for a manufacturing tax credit of $0.87 per kilogram.

• Structural fasteners are eligible for a manufacturing tax credit of $2.28 per kilogram.

• These two types of components are usually made of steel.

Gary Schuster, the CEO of OMCO Solar, a domestic scaffold manufacturer in the United States, admitted frankly: "Measuring the impact of the IRA bill's tax credit on the investment in the tracker manufacturing industry could be a challenge." Even so, they (policymakers) believe that it is reasonable to use the torque tube scale weight (weight) used in the tracker as the measurement standard, because this is a universal standard for manufacturing trackers. I can't think of any other better way. The torque tube is the rotating component of the tracker, running through the entire tracker array and supporting the component rail and the component itself.

Structural fasteners have a wide range of uses According to the IRA Act, they can be used to connect torque tubes, to connect drive assemblies to torque tubes, and to connect mechanical systems, drive systems and solar tracker bases. Schuster estimates that structural fasteners account for approximately 10-15% of the total composition of the tracker.

The excitation path of the fixed bracket

Although ground-mounted fixed-tilt solar mounts and other solar hardware are not included in the capacity credit portion of the IRA, they can still be incentivized through the "domestic content bonus" of the Investment Tax Credit (ITC).

If at least 40% of the components in a photovoltaic array are manufactured in the United States, it is eligible for the domestic content incentive, which will increase the system's tax credit by 10%. If the project meets both the apprenticeship requirements and the current wage standard (prevailing wage) requirements, the system owner can thereby receive a tax credit of up to 40%.

The manufacturer attaches great importance to this fixed bracket option because it is mainly (if not entirely) made of steel. Steelmaking is an active industry in the United States. The domestic content credit clause only requires that steel components be manufactured in the United States, and has no requirements for the source of metal additives used in the refining process.

Challenges and unsolved problems

McKiernan, the president of Terrasmart, pointed out: "The local content of the entire project must reach a threshold, but in many cases, manufacturers find it difficult to meet this goal merely with brackets and inverters." Although there are some local alternatives available, the choices are very limited and there may be a shortage in the coming years. We hope that our customers' focus can truly be placed on the electromechanical balance (BOS) of the system, so that they can meet the local content requirements.

At the time of the release of this article, the US Department of the Treasury is soliciting public comments on the implementation details and availability of the IRA Clean Energy Tax Credit. Many issues remain to be clarified, including the details of the current wage standards, the eligibility for tax credit products, and other issues related to the overall advancement of the IRA.

Eric Goodwin, the director of business development at OMCO, said, "The biggest issues not only include the guidelines for defining local content but also the timing of the first batch of projects." Many customers are asking: When exactly can I get this credit? Is it the first quarter? Is it January 1st? Does it have retroactive effect? Some of our clients have asked us to provide the relevant definitions of the tracker component, but we have to wait again for confirmation from the Ministry of Finance.