The Economic Effects of Clean Energy Manufacturing Provisions in the Inflation Reduction Act: Evidence from the Solar Supply Chain

Grant description:

This project will investigate how the Advanced Manufacturing Production Tax Credit (45X MPTC) and the Advanced Energy Project Investment Tax Credit (48C ITC) affect manufacturing activity throughout the solar photovoltaic supply chain, with a focus on its impacts in the United States. The central research questions are: How do the Inflation Reduction Act’s domestic manufacturing and content-based tax credits affect investment, production, and employment across different stages of the solar manufacturing supply chain? How do these effects propagate downstream to influence solar technology adoption and environmental outcomes? The author will do a reduced form analysis of manufacturing investment and output, develop a structural model of the global solar photovoltaic supply chain, and conduct simulations using the structural model. By focusing on the entire supply chain, from polysilicon and wafers to cells and modules, this research aims to provide the first comprehensive assessment of the Inflation Reduction Act’s economic and environmental implications in the solar industry.