Senate Approves Solar Tax Exclusion in Budget Legislation

 

On July 1st, the US Senate passed the budget reconciliation bill, with Vice President JD Vance casting the decisive vote. According to Politico, the final version removed the proposed 50% new consumption tax on solar projects using Chinese-made components.

 

Politico also reported that the final version allows utility-scale solar and wind projects that start construction within less than a year after the bill's enactment and are operational within four years to still be eligible for the full investment tax credit (ITC)/production tax credit (PTC). Projects that start construction after that period still need to be operational by the end of 2027. According to Roth Capital Partners, "this would effectively extend the 100% ITC/PTC through mid-2030 for projects that can start construction by mid-2026."

 

The manufacturing tax credit (45X) is retained, and stackability seems to have been restored (which means that if solar wafer-cell-panel manufacturers produce all three components in the same factory, they can receive the credit).