Over the last 50 years, the United States has seen widespread outsourcing of manufacturing, largely to countries with weaker labor and environmental standards, under the logic that such outsourcing would be more efficient. Instead, workers lost a primary source of high-paying union jobs, communities lost tax revenue, and our nation lost the industrial base that is the backbone of modern economies. Meanwhile, the loss of good manufacturing jobs disproportionately impacted workers without a college degree and workers of color, contributing to economic and racial inequality. Black manufacturing employment, for example, has fallen by 30% since the 1990s. The outsourcing of U.S. manufacturing also exacerbated global industrial climate pollution, as energy-intensive manufacturing shifted to countries with lower environmental and labor standards and higher emissions.
This legacy of outsourcing has contributed to deep U.S. dependency on highly concentrated overseas supply chains for solar, wind, battery, and other clean technologies. As we build the growing clean energy economy, we face a clear choice. We can continue to hitch our climate goals to vulnerable overseas supply chains that are marred by labor abuses, higher levels of pollution, and shipping bottlenecks. Or we can build our clean energy future on a foundation of good jobs, clean manufacturing, a reliable industrial base, and greater equity. The Inflation Reduction Act makes a historic investment in clean energy deployment and reducing our climate pollution, while coupling both labor and domestic content standards with clean energy tax credits. For the first time ever, an additional ‘bonus’ tax credit is available for taxpayers utilizing domestically-sourced components and materials.
Click the link below to read Domestic Content Bonus for Clean Energy Tax Credits: A User Guide for Project Developers to find out more about the domestic content bonus credit.