US solar policy landscape has ‘a lot of good news’ following OBBBA introduction and Section 232 tariffs

From the introduction of the 4 July “safe harbour” deadline for projects to begin construction in order to access Biden-era tax credits, which triggered a rush in project development to meet the deadline, to last week’s imposition of new tariffs and minimum prices on polysilicon imports under Section 232, the US policy landscape for solar has been one of shifting timeframes and procurement hurdles, causing headaches for a sector that is already playing catch-up to China.

However, for Nazar, the recent wave of policy changes could be to the benefit of US solar manufacturing; or, at the very least, does not herald the end of the industry as we know it.

“It’s important to note that the OBBBA didn’t kill the 45X advanced manufacturing credit,” he says, referencing the tax credit that is available to US-based manufacturers of energy goods, including solar PV components. “The tech-neutral credits [cut short by the OBBBA] are deployment credits that are provided to offtakers to reduce the cost of adoption, but the production and supply-side credits for solar remained intact.”

“They remained on the same timeline; the difference—and there are new conditions that have been applied—relates to demonstrating that the supply chains are not tied to largely Chinese-controlled entities to qualify.”

While he notes that there are uncertainties in the new policy landscape—particularly the “regulatory guidance” for the 45X tax credit that is expected later this year—he argues that a policy environment that has encouraged such strong investment in downstream manufacturing, and leaves space for overseas companies from allied countries to come and play a role, is an ultimately positive one for the US solar sector.

Policy landscape successes

Nazar describes the current US policy landscape as a whole as an “important validation for the supply side and production side approach”, which he says has “an emerging bipartisan consensus”.

“We need to build more things here, including energy supply chains, and solar is included within that area of agreement,” he says. “There’s a bipartisan approach and that was validated by a Republican Congress and a Republican administration, effectively leaving the solar production credit in place, with a little bit of nuance.”

These policies have been particularly successful for the downstream parts of the manufacturing supply chain, such as modules. He describes the increase in module manufacturing capacity in the US, which has risen from 8GW before the IRA to around 65GW a year by 2025, as a “massive success…a 700+% increase in about three years”.

“It’s a remarkable story, and given that, in 2025, we added 43GW [of solar PV] to the grid, that means we are more than covering our module capacity with US production,” says Nazar. “It’s a remarkable strategic-industrial turnaround, so in this regard we’re seeing the impacts and that is worth noting.”

Module manufacturing drives demand for domestic cells, ingots and wafers

While the 45X credit is also available for producers of upstream components, such as cells, ingots and wafers, the US has been notably less effective in building up manufacturing capacity of these parts of the supply chain. Figures from PV Tech Research put the US’ current annual cell manufacturing capacity at just 11GW.

But Nazar is optimistic about upstream production, saying that a policy environment that encourages downstream manufacturing “creates more demand upstream”.

“Having worked in a full end-to-end supply chain manufacturing company before, what I can say is that there is merit in incentivising the end-use production,” he says. “That necessarily means it makes way more sense to continue to onshore upstream [manufacturing]; the more modules that are being produced in the US, the more economic sense it makes to make more cells in the US.

“It is a long-tail story, if you want to create a strategic onshore supply chain, and we’re in the middle of that.”

Indeed, he names QCells’ 3.3GW cell production facility in Georgia, and T1 Energy’s 2.1GW cell plant in Texas, as projects that he thinks “would not have been catalysed” without a policy environment that has encouraged downstream manufacturers to source domestic upstream components.

Effective market mechanisms

These policies also include effective market mechanisms, according to Nazar, that provide flexibility for both US-based buyers and manufactures that are looking to onshore more of their supply chains, and their trading partners across the industry.

“Transferability has been a key lever to make tax credit monetisation more efficient and liquid, leading to more investment, more jobs and more energy deployment,” he says, in reference to tax credit transferability rules that, according to Crux’s own figures, were worth US$63 billion in 2025, up 27% year-on-year.

“Specifically, transferability facilitates capital being reinvested into US manufacturing more quickly—catalysing more manufacturing capacity—rather than sitting tied up on a balance sheet,” Nazar continues. “Manufacturing credits, including 45X, have been one of the more consistently traded parts of that market.”

He expresses similar confidence about the updates to the Section 232 rules. While the introduction of tariffs on foreign polysilicon will make overseas procurement more expensive in the short-term, this could encourage buyers to look for a domestic supply of polysilicon, at a time where companies such as Corning and Wacker have expanded polysilicon manufacturing capacity in the US.

“The mechanism that matters most for actual manufacturing investment is the onshoring incentive program,” explains Nazar. “Approved plans get duty-free import of production equipment, scaled to the size of the investment commitment, with benefits tied to construction progress. That’s a direct lever for capacity upstream of module assembly.

“Combine that with the tariff differential between allied and non-allied supply and a durable 45X framework, and I’d expect this to further accelerate upstream investment the policy is designed to produce.”

‘Friend-shoring’ manufacturing capacity from allied nations

While the decline in earnings posted in Wacker’s most recent financial results demonstrate that this transition to reliance on a more US-based supply chain will not be easy, Nazar notes that foreign companies active in the US, such as Wacker, will have a crucial role to play in shifting the US’ solar supply chain. Specifically, he says that the goal of these policies is not simply to weaken Chinese influence on the global supply chain, but to encourage both the US and its allies to influence the market.

“I would argue the point is to break China’s grip on the supply chain, not to exclude allies,” he says. “Allied investment is the fastest way to close the domestic capacity gap this decade, and we’re seeing clear evidence of this.”

He pointed to the specific examples of Qcells and Toyo, which have operational or under-development cell manufacturing plants in the US, respectively, as companies whose parent firms are Korean and Japanese, and so ought to be welcome allies in a broader understanding of the US’ ‘domestic’ supply chain.

“It’s not just a question of strategic onshoring but strategic ‘friend-shoring’, and so when you widen the aperture to this, you can see the pathway to a strong US manufacturing base, that does promote energy security and energy affordability, that has reliance on nodes that are reliable allies in places where a supply chain shock risk is quite mitigated,” says Hazan. The policy guardrail that is the prohibited foreign entity (PFE) regime is about adversary country control, not foreign ownership in general.”

Ultimately, the combination of strong support for US manufacturing and products from allied countries, and the fact that parts of the Biden-era policy landscape remain in place, means that there may well be space for the US to build a resilient supply chain independent from China, and in a manner that would not require a sudden and highly expensive shift towards greater upstream manufacturing on US soil.

When asked about the future of foreign companies adding more solar manufacturing capacity in the US, Hazan says that he would “expect that trend to continue”.

“45X kept its original 2032 phaseout timeline in the OBBBA even as many of the tech-neutral demand-side credits wind down at the end of 2027,” he says. “That’s a strong signal that support for domestic clean energy manufacturing is durable and bipartisan, and provides more certainty for manufacturers for site cell and module capacity than developers might have assumed a year ago.”

The US policy landscape will be a topic of discussion at our annual PV CellTech conference in San Francisco on 13-14 October 2026. For the full agenda and details on booking, click here.