President Biden’s Investing in America agenda—including the Inflation Reduction Act , Bipartisan Infrastructure Law, and the CHIPS and Science Act—is revitalizing American manufacturing, creating good-paying jobs in communities across the country, strengthening our national and energy security and building a clean energy economy. Already, since the beginning of the Biden Administration, private companies have announced $470 billion in investments in manufacturing and clean energy – in innovative industries like electric vehicles and batteries, solar, and semiconductors, to name a few. 

An analysis from the Department of Energy (DOE) and the National Renewable Energy Laboratory (NREL) has found that—thanks to the major investments in the President’s Investing in America agenda—the U.S. could deploy up to 220 GW of wind energy, over 360 GW of solar energy, and 80 GW of battery storage over the remainder of this decade. That’s enough new clean electricity to power more than 100 million homes each year. Building this much clean energy is valuable on its own, as it will reduce pollution and create jobs across the country. But it will have an even bigger impact on the U.S. economy if we ensure these projects are built with made-in-America products and technologies. 

How does the domestic content bonus work? 

New guidance released by the Treasury Department and the IRS today on the domestic content bonus will strengthen clean energy supply chains by incentivizing the onshoring of clean energy manufacturing and deployment. This bonus provision was created under the Inflation Reduction Act and makes the existing tax credits for clean electricity—up to 2.75 cents (2022 value, adjusted for inflation in future years) for every kWh of clean electricity produced, or up to a 30% investment tax credit—even more valuable if the clean electricity is made using equipment and parts built in the United States. The bonus provision increases the value of the production tax credit by 10% and the investment tax credit by up to ten percentage points for projects that meet domestic content requirements for iron, steel, and manufactured products. To receive the full value of the bonus, projects must also comply with the Inflation Reduction Act’s prevailing wage and apprenticeship requirements.  
Having this bonus credit available could drive 50 GW of additional clean energy deployment by 2030, according to DOE and NREL analysis. 
To qualify:

• The iron and steel components of a facility must be 100% produced in the United States
• 40% of the total costs of manufactured products and their components incorporated in a facility (20% for offshore wind) must be produced in the United States, increasing to 55% in 2027 (2028 for offshore wind).

The bonus provision rewards clean energy developers that source their iron, steel, and manufactured products from American manufacturers. Developers have historically turned to foreign products based on cost, availability, or know-how. This bonus will make it more financially attractive to source American-made components, generating demand for domestic materials in clean electricity projects, incentivizing manufacturers to make investments in new capacity for critical, high-value supply chain segments, including wind turbines, solar cells, battery cells, and additional critical components. 

Demand-focused provisions like the domestic content bonus work hand-in-glove with an additional tax credit created under the IRA, the 45X Advanced Manufacturing Tax Credit, which provides a per unit production tax credit for manufacturers of key clean energy components. And the 48C Advanced Energy Project Credit – a $10 billion allocated credit with at least $4 billion reserved for coal communities – can provide further support for clean energy manufacturing and help to ensure that America’s energy communities, which fueled American manufacturing and innovation for the past century, continue to be a driving force in our energy economy. Paired with the catalytic resources in the Bipartisan Infrastructure Law for clean energy deployment and manufacturing, the President’s Investing in America agenda is building a robust American supply chain for critical energy technologies.

With the domestic content bonus, we can meet our demand for clean energy with products made in America

The combination of the domestic content bonus and 45X tax credit can drive a boom in domestic manufacturing, improving U.S. energy security. DOE expert analysis suggests that the domestic content bonus and 45X tax credit, in tandem, could ensure that domestic manufacturers meet the majority of U.S. demand for clean electricity by 2030, even as that demand accelerates rapidly, for example:

• Annual solar PV cell production capacity could grow from meeting less than 25% of current demand to meeting more than 50% of potential 2030 demand.
• Annual solar PV module production capacity could grow from meeting less than 25% of current demand to meeting roughly all of potential 2030 demand. 
• Wind turbine blade manufacturing facilities could reopen and expand, allowing turbine blade production to meet more than 50% of potential 2030 demand.
• Annual wind tower production capacity could continue to grow, allowing domestic production to meet more than 50% of demand through 2030 even as that demand significantly increases.

This growth means many more quality manufacturing jobs and economic benefits here in America – and that’s just by 2030.

DOE is supporting domestic energy supply chains 

The innovative clean energy tax incentives introduced by the Inflation Reduction Act are just one way that the Biden Administration’s Investing in America Agenda is advancing domestic clean energy. The Investing in America agenda takes a whole-of-government approach to unlocking the potential of American clean energy manufacturing and onshoring and retaining clean energy supply chains.  In 2022, DOE published America’s Strategy to Secure the Clean Energy Supply Chain, including a series of deep dive reports on wind energy, solar energy, and more. DOE is also investing heavily in domestic clean energy manufacturing, including through programs such as the Solar Manufacturing Incubator program, the FLOWIN Prize for the manufacture of floating offshore wind platforms, the upcoming $30 Million MAKE IT Prize to Accelerate Manufacturing of Critical Clean Energy Technologies, and more.

Taken in tandem with these other programs, the bonus will help to drive tens of billions of dollars in investment this decade into a robust domestic supply chain.

Already, this holistic supply chain strategy is reaping benefits. Since the start of the Biden Administration, there have been many exciting announcements of major manufacturing and supply chain projects, including more than $95 billion in batteries, $5 billion in solar power, and at least $3.5 billion in offshore wind.

Together, the incentives under President Biden’s Investing in America agenda provided by the Inflation Reduction Act, Bipartisan Infrastructure Law and CHIPS and Science Act—as well as the ambition and innovation of America’s manufacturers and workers—will increase energy security, boost our economy, and create good, union jobs that will invigorate our communities.