Enphase - New government decision

I was wondering why Enphase was up 7% to 10% early this morning but I couldn’t find any news. Then I got this news report from Schwab. Here’s an excerpt:

The U.S. Treasury Department on Friday clarified that developers of solar energy projects can claim a new subsidy for facilities built with American-made products even if the system’s panels contain cells made entirely with Chinese materials.

The long-awaited rules around how companies can claim a new tax credit for clean energy projects built with domestic equipment represented a compromise between conflicting proposals by solar project developers, which rely on cheap imports to keep costs low, and manufacturers that want to expand and compete with China to supply the U.S. market.

Investors viewed the news as a boon to companies with existing or future plans for U.S. factories. Shares of First Solar Inc, the top U.S. solar manufacturer, soared 26% following the announcement, while shares of inverter maker Enphase Energy Inc rose more than 7%.

President Joe Biden’s Inflation Reduction Act (IRA), signed into law last year, offers billions of dollars in tax credits for facilities using American equipment to speed decarbonization of the U.S. power sector, create domestic jobs and challenge China’s dominance in manufacturing.

The law is viewed as a watershed for domestic solar manufacturing, which has struggled for years to compete with a flood of cheap imports from China. Since passage of the IRA, companies have announced more than $13 billion in U.S. factory investments, according to the Solar Energy Industries Association (SEIA).

The IRA contains a 30% tax credit for renewable energy facilities like solar and wind farms, with a bonus worth an additional 10% of the project cost for using domestic content.

To qualify for the bonus, the IRA specifies that all of a project’s iron or steel products must be “melted and poured” domestically and that 40% of the cost of so-called manufactured products must be made in the United States. For offshore wind, a new U.S. industry, domestic content must make up 20% of costs.

Solar and onshore wind project developers, however, have been awaiting clarification of how that 40% should be calculated, saying the uncertainty was stalling business…