America’s PV producers found themselves in the Trump administration’s crosshairs last week when the US president signed an executive order withdrawing solar manufacturing from the Defense Production Act (DPA).
This reversed a Biden-era provision from 2022 aimed at kickstarting US domestic PV manufacturing by earmarking it as an industry deemed critical for national security and thus eligible for certain funding streams.
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For those in the US clean energy business nervously waiting to see how Trump’s “drill, baby, drill” mantra in support of oil extraction will hit the sector, news of the DPA rescission will doubtless cause further agitation. Many will wonder whether this executive order fires the starting gun on a wider assault by the Trump government on support for clean energy support, most significantly the Inflation Reduction Act (IRA).
DPA rescission of minimal significance
The withdrawal of PV manufacturing from the DPA itself seems largely symbolic. US solar industry figures contacted by PV Tech said the DPA provisions for solar manufacturers were rarely – if ever – used, having been fairly quickly superseded by the IRA and its comprehensive package of tax credits and other support.
“There’s a good reason why you really haven’t heard much about the DPA; the net effect was [PV manufacturers] really didn’t use it very much,” said Mike Carr, executive director of the Solar Energy Manufacturers for America (SEMA) Coalition.
“The DPA authority was a little bit overtaken by events as the IRA tax credits were passed – the manufacturing tax credit and the domestic content bonus, those are the critical pieces,” Carr added. “I’m not aware of any manufacturers actually using the DPA authority or requesting the use of the DPA authority, so it’s not really been on the individual manufacturers’ radar screen as much.”
This was underscored by Martin Pochtaruk, chief executive of Heliene, a Canada-headquartered module producer with a growing presence in the US.
“I read today from someone that solar module manufacturing is coming to a halt in the US because of this rescission,” said Pochtaruk. “And I look at that and think, what are they talking about!”
Will the IRA be next?
Quizzed on whether the Trump government might be coming for the IRA next, Pochtaruk said he was unaware at this point of specific plans to roll it back.
“You can look for conspiracy theories anywhere and everywhere, but there are really none at this point,” he said.
Pochtaruk highlighted the cross-party support the IRA largely enjoys because of the impact it has had in creating jobs: “You might have seen already over 20 representatives from the Republican Party publicly writing to the speaker of the house saying: do not touch it. And that really shows that there will be no alignment within the Republican Party should the Ways and Means Committee push for an overall declaration of action, particularly on the 45X and 48C tax regulations, because that has in many jurisdictions, particularly Republican ones, created thousands of jobs.”
In Heliene’s own case, Pochtaruk said its two US sites, both in Minnesota, are in areas with Republican house representatives: “Politicians, independent of the party, independent of the country, they always want job creation, and they want job creation in their own district because, basically, all they look for is being re-elected.”
Budget reconciliation
Even if the political will to water down the IRA provisions exists, a Congressional act will be needed for anything to change. Theoretically, the opportunity for that to happen could come in the 2025 budget reconciliation process. There have been some suggestions that one option being considered is to phase IRA tax credits out earlier than 2032, when they were originally expected to be wound down, but as yet, nothing specific is on the table.
“Any modification to the Inflation Reduction Act has to come through an act of Congress,” said Pochtaruk. “It has to come through a bunch of reconciliation that has been agreed between two committees, one is the Finance Committee, and the second one is the Ways and Means Committee. At this point, nothing that is Inflation Reduction Act-related is being included.”
Carr also said, that based on conversations he has had with administration figures and politicians, he was confident of an ongoing commitment in the new administration to supporting domestic manufacturing in the US.
Pressed on whether this commitment would extend to clean energy, a sector to which there is broad ideological opposition among Trump and many others in the Republican Party, Carr added: “[President Trump] certainly has personal preferences, but I still take it as a mark that in the [presidential] debate with [Democratic nominee] Kamala Harris, he caveated that very statement by saying, ‘I do like solar, though’”.
Solar fundamentals
Whether that off-the-cuff remark signified a genuine desire on Trump’s part to safeguard solar from any wider rollback of federal clean energy support will doubtless become clearer as the budget reconciliation process takes shape later this year.
Beyond those political wranglings, though, are the basic facts of supply and demand on which solar energy, supported by locally produced equipment, ticks all the right boxes.
On the demand side, the digital boom and its insatiable hunger for electrons means America’s appetite for electricity is only going one way. On the supply side, being cheap and quick to deploy, solar, particularly paired with storage, is ideally placed to meet a substantial proportion of the load growth expected in the US in the coming years. Add to that the use of domestically produced equipment, breaking US reliance on imported Chinese hardware, and the proposition doesn’t sound ideologically so far removed from the Trump administration’s aims.
“I think we do fit in very nicely to that agenda, because solar, being as cheap as it is and as fast to deploy, particularly now that the United States is checking into a sort of a demand growth scenario, is critical, it’s just got to be part of the mix,” said Carr.
So although there may be some kind of battle to come over the IRA and its provisions for solar and other clean energy technologies, there is also a sense that the sector is well positioned to ride out the storm.
Pochtaruk pointed out that during the last Trump era, which, like Trump 2.0, was characterised by its hostility to clean energy, solar still managed to grow by around 17% year over year. That’s significantly less than the 50% or so year-on-year growth under Biden, but even if solar in Trump’s second term performs at a similar level to his first, that would still be a “healthy” level of growth, Pochtaruk said.
All eyes will be on Capitol Hill in the coming months to see which ways the winds of political fortune blow for America’s clean energy industry.
PV Tech publisher Solar Media will be organising the fourth edition of Large Scale Solar USA in Dallas, Texas 29-30 April. After a record year for solar PV additions in the US, the event will dive into the ongoing uncertainties on tariffs, tax credits and trade policies as more domestic manufacturing becomes operational. Other challenges, such as the interconnection queues and permitting, will also be covered in Dallas. More information, including how to attend, can be read here.
