May 12, 2023

The National Electrical Manufacturers Association commends the updated and clear guidance on the domestic content bonus under the Inflation Reduction Act for clean energy projects and facilities that meet American manufacturing and sourcing requirements. The U.S. Department of the Treasury announced the new guidance today, taking a major step towards enabling U.S. manufacturers, strengthening our supply chains and furthering emissions reduction goals.

“NEMA thanks Treasury Secretary Yellen and the department for providing industry with clear guidance on what can be considered as manufactured in the United States”, said NEMA President and CEO, Debra Phillips. “With any undertaking as massive in scale as altering our supply chain and increasing domestic production, clear direction from the Biden administration is critical to success. This is a win for American manufacturers and for progress on our clean energy transition. We look forward to working with the administration during the rulemaking process to further improve on the proposed guidance. We also urge the administration to take a similarly clear, comprehensive, and workable approach to the pending Build America Buy American guidance for infrastructure projects.”

NEMA has encouraged guidance that is achievable, understood and sends clear signals to the manufacturing industry. These updates in today’s guidance are areas that NEMA has supported:

• Clear definition on Iron and Steel: The guidance clearly explains how to classify iron and steel products, and even provides examples of what products will be considered iron and steel products or manufactured products. Treasury’s updated definition removes uncertainty and provide manufacturers with a roadmap to successful implementation.

   

• Rational manufactured product requirements: Treasury incorporated some of the well understood and established precedent of Buy America requirements in the guidance. And provided clear examples of how to calculate compliance with the Adjustment Percentage Rule.

   

• Including Puerto Rico in the map for where domestic products can be manufactured: The guidance includes the Commonwealth of Puerto Rico as well as the District of Columbia, Guam, American Samoa, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands in the definition of United States for the purposes of the guidance. A welcome clarification that will leverage vital manufacturing capabilities.

Incentivizing renewable energy projects is a major component of fulfilling the Biden administration’s goals on electrification, decarbonization and strengthening our supply chain. Coupled with clear and sensible guidance on the domestic content bonus, the electroindustry can now accelerate the necessary manufacturing processes to help achieve those goals.