According to the U.S. Treasury Department, renewable energy facilities such as solar and wind farms are eligible for a 30 percent tax credit. Facilities can also receive an additional 10% of the camping solar panels project cost if they use enough American-made materials.

This is a big temptation for manufacturers. George Hershman, chief executive of U.S. solar contractor SOLV Energy, said the average size of its projects is $300 million or $400 million, so the subsidies can be substantial.

Specifically, the rules state that 100 percent of the iron or steel material in the project must be "melted and poured" in the United States. In addition, solar and onshore wind farm projects must have more than 40 per cent of the "manufactured products" that make up the facility mined, produced or manufactured in the US (at cost). For projects starting construction after 2026, this proportion increases to 55%.

But the IRA's original text doesn't spell out exactly what parts in a solar project are "finished products," and project developers say the uncertainty is holding back business. In February, for example, First Solar said it would hold off on further plant expansion until the U.S. Treasury Department issues guidelines.

The big challenge is that while the IRA wants to spur the development of related manufacturing industries in the United States, many of them barely exist in the United States, such as silicon ingots and specialty glass for solar panels and large steel plates for offshore wind arrays. Most of these products and components are imported from overseas, including China.

Now, the Treasury Department has finally released all the details. The documents show that "finished products" in a typical solar facility include photovoltaic trackers, photovoltaic modules and photovoltaic inverters. Photovoltaic modules include photovoltaic cells, mounting frames or backplanes, glass, encapsulants, backplanes, junction boxes (including pigtails and connectors), edge seals, earthenware, adhesives, bus bars and bypass diodes.

And therein lies the subtlety of the policy. Typically, photovoltaic cells account for about 30% of the cost of the products that make up a solar facility. To produce solar cells, the dominant technology in the market is polysilicon, but there is currently no supply of polysilicon cells in the United States. According to the International Energy Agency, China produces almost all of the world's silicon wafers, 85 percent of its batteries and three-quarters of its photovoltaic modules. China is also the world's leading producer of polysilicon.

As a result, the Solar Energy Industries Association (SEIA) has previously proposed that panels should be eligible for the tax credit, regardless of where the cells inside are produced, as long as they are assembled in the United States. SEIA said that if a requirement is made for U.S. batteries that do not currently exist, it will hinder the deployment of solar energy in the United States.

In other words, under current rules, U.S. solar producers can continue to import solar cells while trying to meet the 40 percent domestic content threshold for other components. SEIA believes this will "trigger a wave of investment in U.S.-made clean energy equipment and components."

First Solar also called the manufacturing details an "important first step" that would create important demand signals and incentivize the purchase of American-made solar power.