NTPC Green Energy’s IPO Oversubscribed 2.5 Times

Telangana DISCOM Floats Tenders for 3 MW Solar Power Projects

Daily News Wrap-Up: India Adds 16 GW Solar Capacity in 9M 2024

CMPDI Invites Bids for 10 MW Solar Project at Mahanadi Coalfields

RERC Upholds Penalty for Failure to Comply with Renewable Energy Regulations

Hyundai to Source 118 MW Power from Fourth Partner’s Solar and Wind Projects

India Adds an Unprecedented 16 GW Solar Capacity in 9M 2024

Daily News Wrap-Up: UPNEDA Tenders 2 MW Rooftop Solar Projects

Maxeon Solar Modules Detained by US Customs Authority

Sungrow, TBEA, FIMER Dominate Solar Inverter Rankings in First Half of 2024


					<table id="amazon-polly-audio-table">
						<tr>
						<td id="amazon-polly-audio-tab">
							<div id="amazon-ai-player-label">Listen to this article</div>
							<div id="amazon-ai-player-container">
			<audio class="amazon-ai-player" id="amazon-ai-player" preload="none" controls   controlsList="nodownload" >
				<source type="audio/mpeg" src="https://cms.mercomindia.com/wp-content/uploads/2024/10/amazon_polly_71891.mp3?version=1730780668">
			</audio>
		</div>
							<div id="amazon-polly-subscribe-tab"></div>
							<div id="amazon-polly-by-tab"></div>
						</td>
						</tr>
					</table><p>The <a href="https://home.treasury.gov/" target="_blank" rel="noopener">U.S. Department of Treasury</a> and the Internal Revenue Service (<a href="https://www.irs.gov/" target="_blank" rel="noopener">IRS</a>) have released the final Advanced Manufacturing Production Credit regulations to boost the growth of domestic clean energy manufacturing under the Inflation Reduction Act (IRA).</p>
<p>These regulations, effective 60 days after publication in the Federal Register, clarify eligibility, credit calculations, and reporting requirements for domestic manufacturers of renewable energy components, including solar, wind, battery components, inverters, and critical minerals.</p>
<p>The 45X Advanced Manufacturing Production Credit, introduced through the IRA, incentivizes U.S.-based production of renewable energy components. Eligible products include solar modules, photovoltaic cells, wind turbines, inverters, battery components, and an extensive list of critical minerals essential for energy technologies.</p>
<p>The final regulations largely <a href="https://www.mercomindia.com/us-guidance-45x-tax-credit" target="_blank" rel="noopener">align</a> with the proposed rules and guidance issued last December.</p>
<p>Manufacturers can apply the credit to their annual business tax credit by producing and selling eligible items domestically. Sales to related entities also qualify under certain circumstances, allowing vertically integrated companies to benefit fully under the 45X credit.</p>
<p>The regulations are designed to reduce dependency on foreign supply chains for critical renewable technology inputs by boosting domestic production and ensuring the fair application of credits across the supply chain. The Treasury mandates rigorous reporting and compliance to prevent improper claims and fraud.</p>
<p>Eligible solar components under Section 45X include solar modules, photovoltaic cells and wafers, solar-grade polysilicon, torque tubes, structural fasteners, polymeric backsheets, and solar trackers. Wind components include blade, nacelle, tower, offshore wind foundation, and related offshore wind vessels.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-71908 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC.png" alt="Final List of Eligible Components for Advanced Manufacturing Production Tax Credit (45X MPTC)" width="852" height="812" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC.png 852w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC-300x286.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC-768x732.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC-650x619.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC-624x595.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-45X-MPTC-600x572.png 600w" sizes="(max-width: 852px) 100vw, 852px" /></a></p>
<p>Eligible critical minerals include aluminum, antimony, arsenic, barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, dysprosium, erbium, europium, fluorspar, gadolinium, gallium, germanium, graphite, hafnium, holmium, indium, iridium, lanthanum, lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, tellurium, terbium, thulium, tin, titanium, tungsten, vanadium, ytterbium, yttrium, zinc, and zirconium.</p>
<p>Battery components include electrode active materials, battery cells, or battery modules. Inverters include central inverters, commercial inverters, distributed wind inverters, microinverters, residential inverters, and utility inverters.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-71909 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit.png" alt="Final List of Eligible Components for Advanced Manufacturing Production Tax Credit" width="958" height="398" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit.png 958w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-300x125.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-768x319.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-650x270.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-624x259.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2024/10/Final-List-of-Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-600x249.png 600w" sizes="(max-width: 958px) 100vw, 958px" /></a></p>
<p>All eligible components must be manufactured within the U.S. or its territories. However, subcomponents or raw materials can be sourced internationally, a point emphasized by industry stakeholders who face limited domestic options for certain raw materials. Critical minerals qualify under the credit if processed within the U.S. or its territories.</p>
<p>The credit applies only if the manufacturing process substantially transforms inputs into a distinct product, excluding minor assembly or superficial changes. This rule, enforced with examples, ensures that only significant manufacturing operations qualify, reflecting stakeholder concerns about maintaining clear credit boundaries.</p>
<p>The regulations gradually phase out the credit for all eligible items except critical minerals. This phase-out will apply to most eligible components, excluding critical minerals, and will begin at the end of 2029. Specifically:</p>
<ul>
<li>For eligible components sold in 2030, the credit amount will be reduced by 25%.</li>
<li>In 2031, the credit will decrease to 50% of its original amount.</li>
<li>In 2032, it will drop to 25%.</li>
<li>After December 31, 2032, no credit will be available for most components.</li>
</ul>
<p>Credits are also available when eligible components are integrated into larger products and sold as complete units. A distinct credit is provided to encourage full vertical integration in manufacturing processes within the U.S. as long as a substantial transformation of components has occurred.</p>
<p>To aid companies that rely on contract manufacturing, the regulations allow credits to be claimed if the primary manufacturer performs the bulk of the production process. Contract arrangements are eligible if they meet specific requirements for transformation activities, with examples covering cases for solar modules and battery systems.</p>
<p>In August, the Treasury Department and IRS <a href="https://www.mercomindia.com/us-releases-new-guidelines-under-inflation-reduction-act/" target="_blank" rel="noopener">proposed</a> rules and guidelines under the Inflation Reduction Act to harmonize sustainable energy and employment opportunities and solidify commitment to the “Investing in America” agenda.</p>
<p>Last August, President Joe Biden <a href="https://www.mercomindia.com/inflation-reduction-act-faster-transition-clean-energy-u-s/" target="_blank" rel="noopener">signed</a> the IRA, which was passed by the U.S. House of Representatives and the Senate. The IRA proposes $369.75 billion in energy security and climate change programs over ten years.</p>


US Finalizes Manufacturing Production Credit Rules for Clean Energy Components


					<table id="amazon-polly-audio-table">
						<tr>
						<td id="amazon-polly-audio-tab">
							<div id="amazon-ai-player-label">Listen to this article</div>
							<div id="amazon-ai-player-container">
			<audio class="amazon-ai-player" id="amazon-ai-player" preload="none" controls   controlsList="nodownload" >
				<source type="audio/mpeg" src="https://cms.mercomindia.com/wp-content/uploads/2024/06/amazon_polly_66781.mp3?version=1717392827">
			</audio>
		</div>
							<div id="amazon-polly-subscribe-tab"></div>
							<div id="amazon-polly-by-tab"></div>
						</td>
						</tr>
					</table><p>The U.S. has proposed new incentives under the Inflation Reduction Act (IRA) by offering tax credits for electricity produced with low or zero greenhouse gas emissions, aligning financial assistance with environmental objectives.</p>
<p>The U.S. <a href="https://home.treasury.gov/" target="_blank" rel="noopener">Department of the Treasury</a> and Internal Revenue Service (<a href="https://www.irs.gov/" target="_blank" rel="noopener">IRS</a>) detailed the regulations in sections 45Y and 48E of the Internal Revenue Code.</p>
<p>The current Production Tax Credit and Investment Tax Credit for projects starting before 2025 will be phased out and replaced by the Clean Electricity Production Credit and Clean Electricity Investment Credit for projects operational after December 31, 2024.</p>
<p>&#8220;The Clean Electricity Tax Credits provide certainty to the market and are poised to drive substantial further growth and lower utility bills over the long run,&#8221; said Treasury Secretary Janet Yellen.</p>
<p>Government estimates show the credits could reduce power sector emissions by up to 73% below 2022 levels by 2035 and save consumers on electricity costs.</p>
<p>The proposed rules identify technologies qualifying for the credits, including wind, solar, hydropower, marine and hydrokinetic, nuclear fission and fusion, geothermal, energy storage, and certain waste energy recovery projects.</p>
<p>Meanwhile, technologies that rely on combustion or gasification must undergo a lifecycle analysis to demonstrate net-zero emissions.</p>
<p>The regulations outline how to calculate credits, define qualified facilities, and specify increased credit amounts for facilities meeting prevailing wage and apprenticeship requirements. They specify that taxpayers must maintain thorough records, including third-party reports, verifying emissions.</p>
<p>The Treasury sought public comments on the proposal over 60 days before issuing final rules.</p>
<p>China recently took the U.S. to the World Trade Organization for <a href="https://www.mercomindia.com/china-us-wto-ira-subsidies" target="_blank" rel="noopener">consultations</a> regarding certain tax credits under IRA to promote the production of electric vehicles and renewable energy projects.</p>
<p>Last December, the Treasury and IRS introduced a new Section 45X that <a href="https://www.mercomindia.com/us-guidance-45x-tax-credit" target="_blank" rel="noopener">provides</a> a credit for the production (within the U.S.) and sale of certain eligible components, including solar and wind energy components, inverters, qualifying battery components, and applicable critical minerals.</p>


US Proposes Expanding New Clean Electricity Production Tax Credits


					<table id="amazon-polly-audio-table">
						<tr>
						<td id="amazon-polly-audio-tab">
							<div id="amazon-ai-player-label">Listen to this article</div>
							<div id="amazon-ai-player-container">
			<audio class="amazon-ai-player" id="amazon-ai-player" preload="none" controls   controlsList="nodownload" >
				<source type="audio/mpeg" src="https://cms.mercomindia.com/wp-content/uploads/2023/12/amazon_polly_61705.mp3?version=1703824648">
			</audio>
		</div>
							<div id="amazon-polly-subscribe-tab"></div>
							<div id="amazon-polly-by-tab"></div>
						</td>
						</tr>
					</table><p>U.S.-based solar technology company <a href="https://www.firstsolar.com/en-IN/" target="_blank" rel="noopener">First Solar</a> has entered into two separate tax credit transfer agreements to sell $500 million and up to $200 million of Inflation Reduction Act (IRA) advanced manufacturing production tax credits to <a href="https://www.fiserv.com/en.html" target="_blank" rel="noopener">Fiserv</a>, a financial technology services provider.</p>
<p>According to the terms of these agreements, Fiserv will acquire the tax credits at a rate of $0.96 per $1 during the first half of 2024. This price includes fees and commissions paid by First Solar to the placement agent.</p>
<p>The tax credits are the outcome of the sale of solar modules produced in 2023 by First Solar’s operational manufacturing facilities in the U.S., including its recently commissioned third Ohio factory.</p>
<p>First Solar operates fully integrated solar manufacturing facilities where thin film wafers, cells, and modules are produced through an integrated process. In this process, a sheet of glass undergoes transformation into a fully functional solar panel in approximately four hours.</p>
<p>Due to its vertical integration, First Solar qualifies for advanced manufacturing production tax credits, which are permissible for the production of solar wafers, cells, and modules under Section 45X of the IRA.</p>
<p>The production tax credit is a per-kilowatt-hour tax credit applicable to electricity generated by solar and qualifying technologies during the first decade of a system’s operation. It serves to reduce federal income tax liability and is subject to annual inflation adjustments.</p>
<p>Solar systems placed in service in 2022 or later, commencing construction before 2033, are eligible for a 2.75 ¢/kWh production tax credit if they meet labor requirements outlined by the Treasury Department or are under 1 MW in size.</p>
<p>According to the Internal Revenue Service and the Treasury Department <a href="https://www.energy.gov/eere/solar/federal-tax-credits-solar-manufacturers" target="_blank" rel="noopener">guidelines</a>, “Manufacturers may also elect to transfer all, or a portion, of the tax credits for a given year to an unrelated eligible taxpayer. Credits from a single property can be sold to multiple buyers in the same tax year.”</p>
<p>First Solar anticipates that the liquidity generated from this transaction will expedite the enhancement of its cash position in the U.S. through the monetization of Section 45X credits. This move is expected to fortify the company’s balance sheet and support continued investments in crucial growth areas, such as research and development.</p>
<p>Citigroup Global Markets is the placement agent for First Solar on the transaction. The agreements follow the <a href="https://www.mercomindia.com/us-guidance-45x-tax-credit" target="_blank" rel="noopener">proposed</a> rulemaking by the U.S. Department of Treasury and Internal Revenue Service to implement the Section 45X credits.</p>
<p>In August last year, President Joe Biden <a href="https://www.mercomindia.com/inflation-reduction-act-faster-transition-clean-energy-u-s/" target="_blank" rel="noopener">signed</a> the Inflation Reduction Act, which proposes $369.75 billion in energy security and climate change programs over ten years.</p>


First Solar Plans to Offload IRA Tax Credits Worth $700 Million


					<table id="amazon-polly-audio-table">
						<tr>
						<td id="amazon-polly-audio-tab">
							<div id="amazon-ai-player-label">Listen to this article</div>
							<div id="amazon-ai-player-container">
			<audio class="amazon-ai-player" id="amazon-ai-player" preload="none" controls   controlsList="nodownload" >
				<source type="audio/mpeg" src="https://cms.mercomindia.com/wp-content/uploads/2023/12/amazon_polly_61423.mp3?version=1703237279">
			</audio>
		</div>
							<div id="amazon-polly-subscribe-tab"></div>
							<div id="amazon-polly-by-tab"></div>
						</td>
						</tr>
					</table><p>The <a href="https://home.treasury.gov/" target="_blank" rel="noopener">U.S. Department of Treasury</a> and the Internal Revenue Service (<a href="https://www.irs.gov/" target="_blank" rel="noopener">IRS</a>) have proposed regulations and provided guidance to the advanced manufacturing production credit established by the Inflation Reduction Act (IRA).</p>
<p>The new Section 45X provides a credit for the production (within the U.S.) and sale of certain eligible components, including solar and wind energy components, inverters, qualifying battery components, and applicable critical minerals.</p>
<p>Eligible solar components include solar modules, photovoltaic cells and wafers, solar-grade polysilicon, torque tube, structural fastener, or polymeric backsheet. Wind components include blade, nacelle, tower, offshore wind foundation, or related offshore wind vessel.</p>
<p>Battery components include electrode active materials, battery cells, or battery modules. Inverters include central inverters, commercial inverters, distributed wind inverters, microinverters, and residential inverters.</p>
<p>The proposed regulations would affect taxpayers who produce and sell eligible components and intend to claim the benefit of an advanced manufacturing production credit by making elective payments or credit transfer elections.</p>
<p>Stakeholders can submit their comments by February 13, 2024.</p>
<p>Tax credits can also be claimed for 10% of the cost of processing 50 critical minerals.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-61441 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1.png" alt="Eligible Components for Advanced Manufacturing Production Tax Credit" width="890" height="663" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1.png 890w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1-300x223.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1-768x572.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1-650x484.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1-624x465.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/Eligible-Components-for-Advanced-Manufacturing-Production-Tax-Credit-1-600x447.png 600w" sizes="(max-width: 890px) 100vw, 890px" /></a></p>
<p>To qualify for section 45X tax credits, a company must manufacture and sell eligible components domestically. The IRS emphasizes that merely assembling, making superficial changes, or partially transforming materials into products is insufficient. There must be a significant transformation of raw materials into a distinct product. Alternatively, the manufacturer can use components made by others to create a different product, such as using solar cells to produce solar modules.</p>
<p>However, a special rule applies to solar-grade polysilicon, electrode active materials, and applicable critical minerals. For these components, the term refers to activities like processing, converting, refining, or purifying source materials, such as brines, ores, or waste streams, to create a unique eligible component.</p>
<p>The IRS said two types of arrangements are not contract manufacturing. One is a routine purchase order for off-the-shelf components that require no more than minimal tailoring. The other is where the factory knows when the contract is signed that it can satisfy the order out of existing stocks or normal production of finished goods.</p>
<p>Components must be manufactured in 2023 or later. Production may have commenced before 2023, like the construction of a wind tower, as long as it is finished in 2023. If an item is produced in one year and sold in the following year, the tax credit is applied in the year of sale.</p>
<p>Global law firm, <a href="https://www.nortonrosefulbright.com/en-in" target="_blank" rel="noopener">Norton Rose Fulbright</a> explains that for instance, if company X produces photovoltaic wafers and sells them to affiliate Y in 2023, and Y sells the cells to a third party Z in 2024, both X and Y can claim tax credits for the components they produced, but not until 2024. However, if a related person election is made where wafers are integrated into cells in 2023, and the cells are sold in 2024, X can claim its tax credit in 2023. Integration, where the component disappears in another, larger eligible component, triggers the tax credit when combined with a related person election.</p>
<p>The eligible components must be produced in the U.S., Puerto Rico, the U.S. Virgin Islands, Guam, or the Northern Mariana Islands.</p>
<p>The origin of the inputs used to make them does not matter.</p>
<p>The eligible components must be sold or incorporated by the manufacturer into other eligible components to trigger tax credits. The IRS said to use general tax principles to determine when a sale occurs.</p>
<p>For eligible components sold in 2030, 2031, and 2032, the reduction in credit percentages is 75%, 50%, and 25%, respectively. The phase-out percentage is zero percent for an eligible component sold after December 31, 2032. Thus, current law provides no section 45X credit after 2032 for eligible components other than for applicable critical minerals.</p>
<p>The proposed regulations have reservations about the potential manipulation of Section 45X tax benefits. In extreme cases where the primary reason for producing and selling eligible components is solely to obtain tax benefits, the rules aim to prevent such misuse. Specifically, if the tax benefits gained from selling an eligible component exceed the production cost of that component, the credit will not be available.</p>
<p>In August, the Treasury Department and IRS <a href="https://www.mercomindia.com/us-releases-new-guidelines-under-inflation-reduction-act/" target="_blank" rel="noopener">proposed</a> rules and guidelines under the Inflation Reduction Act to harmonize sustainable energy and employment opportunities and solidify commitment to the “Investing in America” agenda.</p>
<p>In August last year, President Joe Biden <a href="https://www.mercomindia.com/inflation-reduction-act-faster-transition-clean-energy-u-s/" target="_blank" rel="noopener">signed</a> the ‘Inflation Reduction Act,’ which the U.S. House of Representatives and the Senate had passed. The Act addresses issues of climate change, taxes, healthcare, and inflation. The Act proposes $369.75 billion in energy security and climate change programs over the next ten years.</p>


tax-credits

Get the most relevant India solar and clean energy news.

RECENT POSTS