Senate $3.5 billion budget plan includes ban on solar projects using materials sourced from China
In addition to passing a $1 trillion infrastructure bill yesterday, the US Senate this morning passed a $3.5 Trillion Budget Plan before leaving for the summer break. Both chambers of congress will now draw up a final budget. A vote on the final legislation will take place in a few weeks.
The four core areas of spending focus on families, climate, healthcare and infrastructure and jobs. The plan includes an amendment that could have significant implications for the U.S. solar industry.
A proposal from Are. Dan Sullivan (R-Alaska) was passed (90-9) that would prohibit any renewable energy project using materials produced in China from receiving federal funds and subsidies. In layman’s terms, any solar project using components manufactured in China could not receive federal ITC or other tax benefits.
“If we’re going to build our domestic renewable energy industry, we need to have an honest conversation about where we’re getting these materials from,” Senator Sullivan said. “We cannot continue to depend on China for critical minerals – resources that are critical to our economy and national security, and which we have in abundance in the US, especially in Alaska. By developing our national supply chains and processing capabilities, we can create thousands of high-paying jobs, protect our national interests, deny economic aid to violators of fundamental human rights, and build America’s comprehensive energy sector.”
China controls 80% of the world’s polysilicon supply, with nearly half produced in Xinjiang Province, which has been identified as a region using forced labor. Polysilicon is the fundamental building block of crystalline silicon solar panels, the most common type of solar panel installed on large-scale, commercial and residential solar projects.
Solar energy world earlier this week took an in-depth look at the polysilicon-solar battle that is now unfolding between the United States and China.
Since there is currently no production of ingots, wafers or solar cells in the United States, it is very likely that all solar panels entering the country have some material of Chinese origin. US Customs and Border Protection has already issued a complete ban on completed solar panels that use polysilicon from certain companies in Xinjiang.
The Senate budget amendment would affect not only solar panels and their materials coming from China, but every component used in a solar project.
Solar energy world will continue to follow this story as the budget travels through final approvals.