Build America, Buy America (BABA)-Compliant Solar Manufactured Products

The Build America, Buy America (BABA) Act provisions within the Infrastructure Investments and Jobs Act of 2021 (IIJA) requires that “the head of each Federal agency must ensure that none of the funds made available for a Federal award for an infrastructure project may be obligated unless all of the iron, steel, manufactured products, and construction materials incorporated into the project are produced in the United States” (2 CFR 184.1). 

Specifically, in the case of manufactured products, the product must be both (a) manufactured in the United States and (b) the cost of components of the manufactured product that are mined, produced, or manufactured in the United States must be greater than 55 percent of the total costs of all the components of the manufactured product (2 CFR Part 184.3). In determining whether the cost of components for manufactured products meets that threshold, manufacturers must use the following instructions quoted from 2 CFR 184.5: 

1. “For components purchased by the manufacturer,

• The acquisition cost, including transportation costs to the place of incorporation into the manufactured product (whether or not such costs are paid to a domestic firm), and
• Any applicable duty (whether or not a duty-free entry certificate is issued);

2. For components manufactured by the manufacturer,

• All costs associated with the manufacture of the component, including transportation costs as described in paragraph (a) above, plus
• Allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the manufactured product.” 

The sum of these costs must exceed 55 percent of the total costs of all the components of the manufactured product for that product to be BABA-compliant.