CRES Tax Series: How 45X Ensures American Manufacturing Dominance and Resilient Supply Chains

Republicans are champions of policies that unleash American innovation, bolster domestic energy production and deliver affordable energy to families while strengthening the global competitiveness of American businesses. From pioneering research and development to streamlining regulations and leveraging the tax code, we have a track record of advancing energy independence, supporting manufacturing and driving economic growth.

With this goal in mind, the Advanced Manufacturing Production Tax Credit (45X) is a critical tool to securing America’s energy and manufacturing dominance in a rapidly evolving global marketplace. 45X encourages the domestic production of five types of products: solar, wind and battery components, inverters, and critical minerals. Businesses may only claim the credit for goods produced in the United States or its territories. Goods produced from recycled materials also qualify for the credit.  

45X ALIGNS WITH REPUBLICAN PRIORITIES 

The 45X tax credit is a solution that aligns with conservative principles: incentivizing private sector investment, strengthening domestic supply chains and countering China’s unfair economic advantages. This targeted tax credit supports the production of critical clean energy components right here in the United States. These components include critical minerals, solar panels, turbine blades, batteries and more. 45X ensures American manufacturers have the certainty they need to expand, create jobs and compete, all while playing a vital role in keeping energy costs low for families and businesses.  

Eliminating or reducing the value of this credit now would undermine our manufacturing momentum and cede ground to foreign competitors like China. 45X reflects the same forward-thinking approach Republicans have historically brought to tax credits and policy development. It’s a proven model: incentivize the private sector, unlock innovation and secure America’s competitive edge.  

45X is actively helping our nation meet critical goals: 

• Reshoring Manufacturing: 45X incentivizes the production of clean energy technologies in American factories, bringing jobs back and reducing reliance on foreign supply chains.  

• Energy Security: By supporting domestic production of critical energy components, 45X strengthens our energy independence and protects energy affordability—key pillars of the Republican energy dominance agenda.  

• Economic Growth: This credit drives private investment in advanced manufacturing, boosting local economies and creating high-paying jobs for American workers.  

• Countering China: Preserving 45X helps level the playing field and reduce both domestic and global reliance on China, ensuring America—not Beijing—leads the future of energy innovation. 

45X BOLSTERS U.S. MANUFACTURING AND ENERGY DOMINANCE  

America’s energy and manufacturing demands are surging. From the resurgence of industry to the rise of data centers powering our digital economy, we need a robust energy system to keep pace. The 45X credit is a linchpin in this effort, mitigating risk for manufacturers and accelerating the deployment of next-generation technologies. Without it, new investments could stall, threatening higher costs for American families and businesses at a time when energy markets are volatile and global competition is fierce.  

Since the end of 2022, companies have announced over $130 billion in clean energy manufacturing investments nationwide. North Carolina leads the nation as the state with the highest level of announced private capital investments with $21.1 billion, followed by Georgia ($16 billion) and Michigan ($14 billion). 

KEY TAX TERMS TO KNOW: 

Production Tax Credit (PTC): Production Tax Credits provide a tax credit for producing something and helps reduce operating expenses (OpEx) for their production over a period of time. 45X is a Production Tax Credit, providing a per-unit incentive for manufacturing clean energy components. This reduces operating expenses over time, making it easier for American companies to compete globally. 

Transferability: A credit delivery provision that allows companies to “transfer” tax credits. Transferable tax credits reduce the cost of capital and allow developers and manufacturers to recycle their capital more quickly—this allows them to build infrastructure or expand operations faster. In practice, this allows smaller projects to be enabled or move forward. Top utilizers of transferability include: biofuels, nuclear, carbon capture, direct air capture and advanced manufacturing. 

Direct Pay: A credit delivery provision that allows untaxed entities like co-ops or tax-exempt entities to receive the benefits of tax credits in the form of a payment. 

RECOMMENDATION: PRESERVE THE 45X ADVANCED MANUFACTURING PRODUCTION TAX CREDIT 

Preserving the 45X Advanced Manufacturing Production Tax Credit is about more than energy—it’s about securing America’s economic future. Republicans understand that targeted tax incentives are a powerful tool to leverage vital private sector energy investment, reshore our supply chains and enhance American competitiveness. Letting 45X lapse would be contrary to powering America’s energy and manufacturing dominance agenda and would hand an advantage to China at a critical moment. 

By preserving 45X, we can: 

• Unlock Private Investment: Tax credits like 45X reduce the cost of capital, allowing American manufacturers to scale up operations and build infrastructure faster. 
   

• Secure Supply Chains: Domestic production of critical minerals and energy components reduces our dependence on adversarial nations. 
   

Accelerate Energy Deployments: A strong manufacturing base ensures a steady supply of clean energy technologies, creating jobs and stabilizing costs for deployments.