IRA credits will boost domestic solar tracker production. | So Good News
Domestic solar tracker production will be boosted by recently passed inflation-reducing legislation that includes production tax credits for components found in solar trackers. The federal spending package would provide credits to manufacturers for torque tubes and structural fasteners produced on U.S. soil.
“I think the hope is that those producer tax credits will result in every single producer going offshore. [production of] torque tubes or structural fasteners for onshore,” said Ed McKiernan, president of Terrasmart, a turnkey manufacturer of solar racking, piles and electronic balance systems. “Because of that, the end customers, the owner-operators of these arrays, will want to compete at a lower price. What you’ll see is that tracker prices are even more competitive compared to fixed tilt. “
IRA specifically refers to tracking systems and not fixed tilt. Because the former is the primary solar structure used in large or utility projects in the United States. Because the racking rotates and points the modules toward the sun throughout the day, it produces more energy than a fixed-tilt system in a similar project footprint.
Production credits will be $0.87/kg for torque tubes and $2.28/kg for structural fasteners. Both components are typically made of steel.
“It can be challenging because there are industry inputs in the IRA for the manufacturing tax credit of the tracking equipment,” said Gary Schuster, chief executive officer of domestic racking manufacturer OMCO Solar. “Having said that, I concluded to measure torque tubes in pounds that go into a tracker,” he said. Because it’s a common denominator in producing a very logical tracker. I don’t know how else to do it.”
Torque tubes span the entire row of trackers and are the rotating part of the tracker that host both panel rails and panels.
Structural fasteners serve many purposes. According to the IRA, they connect the torque tubes; Connect the drive assemblies to the torque tubes and connect the mechanical and drive systems to the solar tracker foundations. Schuster estimated that structural fasteners make up about 10 to 15% of the tracker’s total makeup.
Although not included in the production credit portion of the IRA. Ground-mounted tilting solar panels — and other solar hardware — are still incentivized through the Investment Tax Credit (ITC) “domestic content bonus.” Solar arrays built with at least 40% of U.S.-manufactured components may qualify for the domestic participation bonus; A system’s tax credit will be increased by an additional 10%. System owners can receive a 40% tax credit on their array if the projects meet other apprenticeship and prevailing wage requirements.
Manufacturers emphasize this option for fixed tilting because it is made primarily, if not entirely, of steel. Steelmaking is a vibrant U.S. industry, and the domestic ingredient credit requires that steel base materials be produced in the U.S. without metal additives in the refining process.
“They need to meet a specification for the entire domestic content project, and in many cases they’re struggling to get there with modules and inverters,” McKiernan said. “Now there are other options locally.” But they were very limited and sold out for many years to come. What we expect customers to do is really focus on the mechanical and electrical balance system, so they can meet those local content requirements.”
At the time of publication, The Treasury Department is requesting input to implement and deliver the clean energy tax incentives found in the IRA. current wage requirements; Questions remain on product qualifications for tax incentives and the IRA’s total schedule.
“The biggest thing is not only the guidance for local content definition, but also the timing of the first projects,” said Eric Goodwin, director of business development at OMCO. “Many customers have questions about when exactly they will be able to get this credit. Will it be the first trimester? Will it be January 1st? Will it come back to life? Although customers are asking us to provide that definition on tracker components. one more time, We really have to stand back and wait until it is approved at the Treasury level.”