Forms: Form 7207
Final rules 1
(a) In general
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(1) Allowance of credit For purposes of section 38, the advanced manufacturing production credit for any taxable year is an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each eligible component which is—
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(A) produced by the taxpayer, and
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(B) during the taxable year, sold by such taxpayer to an unrelated person.
(2) Production and sale must be in trade or business Any eligible component produced and sold by the taxpayer shall be taken into account only if the production and sale described in paragraph (1) is in a trade or business of the taxpayer.
(3) Unrelated person
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(A) In general For purposes of this subsection, a taxpayer shall be treated as selling components to an unrelated person if such component is sold to such person by a person related to the taxpayer.
(B) Election
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(i) In general At the election of the taxpayer (in such form and manner as the Secretary may prescribe), a sale of components by such taxpayer to a related person shall be deemed to have been made to an unrelated person.
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(ii) Requirement As a condition of, and prior to, any election described in clause (i), the Secretary may require such information or registration as the Secretary deems necessary for purposes of preventing duplication, fraud, or any improper or excessive amount determined under paragraph (1).
(b) Credit amount
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(1) In general Subject to paragraph (3), the amount determined under this subsection with respect to any eligible component, including any eligible component it incorporates, shall be equal to—
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(A) in the case of a thin film photovoltaic cell or a crystalline photovoltaic cell, an amount equal to the product of—
(i) 4 cents, multiplied by
(ii) the capacity of such cell (expressed on a per direct current watt basis),
(B) in the case of a photovoltaic wafer, $12 per square meter,
(C) in the case of solar grade polysilicon, $3 per kilogram,
(D) in the case of a polymeric backsheet, 40 cents per square meter,
(E) in the case of a solar module, an amount equal to the product of—
(i) 7 cents, multiplied by
(ii) the capacity of such module (expressed on a per direct current watt basis),
(F) in the case of a wind energy component—
(i) if such component is a related offshore wind vessel, an amount equal to 10 percent of the sales price of such vessel, and
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(ii) if such component is not described in clause (i), an amount equal to the product of—
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(I) the applicable amount with respect to such component (as determined under paragraph (2)(A)), multiplied by
(II) the total rated capacity (expressed on a per watt basis) of the completed wind turbine for which such component is designed,
(G) in the case of a torque tube, 87 cents per kilogram,
(H) in the case of a structural fastener, $2.28 per kilogram,
(I) in the case of an inverter, an amount equal to the product of—
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(i) the applicable amount with respect to such inverter (as determined under paragraph (2)(B)), multiplied by
(J) in the case of electrode active materials, an amount equal to 10 percent of the costs incurred by the taxpayer with respect to production of such materials,
(K) in the case of a battery cell, an amount equal to the product of—
(i) $35, multiplied by
(ii) subject to paragraph (4), the capacity of such battery cell (expressed on a kilowatt-hour basis),
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(L) in the case of a battery module, an amount equal to the product of—
(i) $10 (or, in the case of a battery module which does not use battery cells, $45), multiplied by
(ii) subject to paragraph (4), the capacity of such battery module (expressed on a kilowatt-hour basis), and
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(M) in the case of any applicable critical mineral, an amount equal to 10 percent (2.5 percent in the case of metallurgical coal) of the costs incurred by the taxpayer with respect to production of such mineral.
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(e)(2), inserted “(2.5 percent in the case of metallurgical coal)” after “10 percent”.
(2) Applicable amounts
(A) Wind energy components For purposes of paragraph (1)(F)(ii), the applicable amount with respect to any wind energy component shall be—
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(iv) in the case of an offshore wind foundation—
(I) which uses a fixed platform, 2 cents, or
(II) which uses a floating platform, 4 cents.
(B) Inverters For purposes of paragraph (1)(I), the applicable amount with respect to any inverter shall be—
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(i) in the case of a central inverter, 0.25 cents,
(ii) in the case of a utility inverter, 1.5 cents,
(iii) in the case of a commercial inverter, 2 cents,
(iv) in the case of a residential inverter, 6.5 cents, and
(v) in the case of a microinverter or a distributed wind inverter, 11 cents.
(3) Phase out and termination
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(b)(1), inserted “and termination” after “Phase out” in heading.
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(A) In general Subject to subparagraphs (C) and (D), in the case of any eligible component sold after December 31, 2029, the amount determined under this subsection with respect to such component shall be equal to the product of—
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(b)(2), substituted “subparagraphs (C) and (D)” for “subparagraph (C)” in introductory provisions.
(i) the amount determined under paragraph (1) with respect to such component, as determined without regard to this paragraph, multiplied by
(ii) the phase out percentage under subparagraph (B).
(B) Phase out percentage The phase out percentage under this subparagraph is equal to—
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(i) in the case of an eligible component sold during calendar year 2030, 75 percent,
(ii) in the case of an eligible component sold during calendar year 2031, 50 percent,
(iii) in the case of an eligible component sold during calendar year 2032, 25 percent,
(iv) in the case of an eligible component sold after December 31, 2032, 0 percent.
(C) Phase out for applicable critical minerals other than metallurgical coal
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(b)(3), added subpars. (C) to (E) and struck out former subpar. (C). Prior to amendment, text of subpar. (C) read as follows: “For purposes of determining the amount under this subsection with respect to any applicable critical mineral, this paragraph shall not apply.”
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(i) In general In the case of any applicable critical mineral (other than metallurgical coal) produced after December 31, 2030, the amount determined under this subsection with respect to such mineral shall be equal to the product of—
(I) the amount determined under paragraph (1) with respect to such mineral, as determined without regard to this subparagraph, multiplied by
(II) the phase out percentage under clause (ii).
(ii) Phase out percentage for applicable critical minerals other than metallurgical coal The phase out percentage under this clause is equal to—
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(I) in the case of any applicable critical mineral produced during calendar year 2031, 75 percent,
(II) in the case of any applicable critical mineral produced during calendar year 2032, 50 percent,
(III) in the case of any applicable critical mineral produced during calendar year 2033, 25 percent, and
(IV) in the case of any applicable critical mineral produced after December 31, 2033, 0 percent.
(D) Termination for wind energy components This section shall not apply to any wind energy component produced and sold after December 31, 2027.
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(b)(3), added subpars. (C) to (E) and struck out former subpar. (C). Prior to amendment, text of subpar. (C) read as follows: “For purposes of determining the amount under this subsection with respect to any applicable critical mineral, this paragraph shall not apply.”
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(E) Termination for metallurgical coal This section shall not apply to any metallurgical coal produced after December 31, 2029.
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(b)(3), added subpars. (C) to (E) and struck out former subpar. (C). Prior to amendment, text of subpar. (C) read as follows: “For purposes of determining the amount under this subsection with respect to any applicable critical mineral, this paragraph shall not apply.”
(4) Limitation on capacity of battery cells and battery modules
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(A) In general For purposes of subparagraph (K)(ii) or (L)(ii) of paragraph (1), the capacity determined under either subparagraph with respect to a battery cell or battery module shall not exceed a capacity-to-power ratio of 100:1.
(B) Capacity-to-power ratio For purposes of this paragraph, the term “capacity-to-power ratio” means, with respect to a battery cell or battery module, the ratio of the capacity of such cell or module to the maximum discharge amount of such cell or module.
(c) Definitions For purposes of this section—
(1) Eligible component
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(A) In general The term “eligible component” means—
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(iii) any inverter described in subparagraphs (B) through (G) of paragraph (2),
(iv) any qualifying battery component, and
(B) Application with other credits The term “eligible component” shall not include any property which is produced at a facility if the basis of any property which is part of such facility is taken into account for purposes of the credit allowed under section 48C after the date of the enactment of this section.
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(C) Material assistance from prohibited foreign entities In the case of taxable years beginning after the date of enactment of this subparagraph, the term “eligible component” shall not include any property which includes any material assistance from a prohibited foreign entity (as defined in section 7701(a)(52), as applied by substituting “used in a product sold before January 1, 2027” for “used in a product sold before January 1, 2030” in subparagraph (D)(iv)(II)(bb) thereof).
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(c)(1), added subpar. (C).
(2) Inverters
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(A) In general The term “inverter” means an end product which is suitable to convert direct current electricity from 1 or more solar modules or certified distributed wind energy systems into alternating current electricity.
(B) Central inverter The term “central inverter” means an inverter which is suitable for large utility-scale systems and has a capacity which is greater than 1,000 kilowatts (expressed on a per alternating current watt basis).
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(D) Distributed wind inverter
(i) In general The term “distributed wind inverter” means an inverter which—
(I) is used in a residential or non-residential system which utilizes 1 or more certified distributed wind energy systems, and
(II) has a rated output of not greater than 150 kilowatts.
(ii) Certified distributed wind energy system The term “certified distributed wind energy system” means a wind energy system which is certified by an accredited certification agency to meet Standard 9.1-2009 of the American Wind Energy Association (including any subsequent revisions to or modifications of such Standard which have been approved by the American National Standards Institute).
(G) Utility inverter The term “utility inverter” means an inverter which—
(i) is suitable for commercial or utility-scale systems,
(ii) has a rated output of not less than 600 volt three-phase power, and
(iii) has a capacity which is greater than 125 kilowatts and not greater than 1000 kilowatts (expressed on a per alternating current watt basis) [OLRC note: So in original. Probably should be followed by a period.]
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(3) Solar energy component
(A) In general The term “solar energy component” means any of the following:
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(B) Associated definitions
(i) Photovoltaic cell The term “photovoltaic cell” means the smallest semiconductor element of a solar module which performs the immediate conversion of light into electricity.
(ii) Photovoltaic wafer The term “photovoltaic wafer” means a thin slice, sheet, or layer of semiconductor material of at least 240 square centimeters—
(I) produced by a single manufacturer either—
(aa) directly from molten or evaporated solar grade polysilicon or deposition of solar grade thin film semiconductor photon absorber layer, or
(bb) through formation of an ingot from molten polysilicon and subsequent slicing, and
(II) which comprises the substrate or absorber layer of one or more photovoltaic cells.
(iii) Polymeric backsheet The term “polymeric backsheet” means a sheet on the back of a solar module which acts as an electric insulator and protects the inner components of such module from the surrounding environment.
(v) Solar module The term “solar module” means the connection and lamination of photovoltaic cells into an environmentally protected final assembly which is—
(vi) Solar tracker The term “solar tracker” means a mechanical system that moves solar modules according to the position of the sun and to increase energy output.
(vii) Solar tracker components
(I) Torque tube The term “torque tube” means a structural steel support element (including longitudinal purlins) which—
(aa) is part of a solar tracker,
(bb) is of any cross-sectional shape,
(cc) may be assembled from individually manufactured segments,
(dd) spans longitudinally between foundation posts,
(ee) supports solar panels and is connected to a mounting attachment for solar panels (with or without separate module interface rails), and
(ff) is rotated by means of a drive system.
(II) Structural fastener The term “structural fastener” means a component which is used—
(aa) to connect the mechanical and drive system components of a solar tracker to the foundation of such solar tracker,
(bb) to connect torque tubes to drive assemblies, or
(cc) to connect segments of torque tubes to one another.
(4) Wind energy component
(A) In general The term “wind energy component” means any of the following:
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(B) Associated definitions
(i) Blade The term “blade” means an airfoil-shaped blade which is responsible for converting wind energy to low-speed rotational energy.
(ii) Offshore wind foundation The term “offshore wind foundation” means the component (including transition piece) which secures an offshore wind tower and any above-water turbine components to the seafloor using—
(I) fixed platforms, such as offshore wind monopiles, jackets, or gravity-based foundations, or
(II) floating platforms and associated mooring systems.
(iii) Nacelle The term “nacelle” means the assembly of the drivetrain and other tower-top components of a wind turbine (with the exception of the blades and the hub) within their cover housing.
(iv) Related offshore wind vessel The term “related offshore wind vessel” means any vessel which is purpose-built or retrofitted for purposes of the development, transport, installation, operation, or maintenance of offshore wind energy components.
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(5) Qualifying battery component
(A) In general The term “qualifying battery component” means any of the following:
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(B) Associated definitions
(i) Electrode active material The term “electrode active material” means cathode materials, anode materials, anode foils, and electrochemically active materials, including solvents, additives, and electrolyte salts that contribute to the electrochemical processes necessary for energy storage.
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(ii) Battery cell The term “battery cell” means an electrochemical cell—
(iii) Battery module The term “battery module” means a module—
(aa) in the case of a module using battery cells, with 2 or more battery cells which are configured electrically, in series or parallel, to create voltage or current, as appropriate, to a specified end use, or
(bb) with no battery cells,
(II) with an aggregate capacity of not less than 7 kilowatt-hours (or, in the case of a module for a hydrogen fuel cell vehicle, not less than 1 kilowatt-hour), and
(III) which is comprised of all other essential equipment needed for battery functionality, such as current collector assemblies and voltage sense harnesses, or any other essential energy collection equipment.
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(d), added subcl. (III).
(6) Applicable critical minerals The term “applicable critical mineral” means any of the following:
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(A) Aluminum Aluminum which is—
(i) converted from bauxite to a minimum purity of 99 percent alumina by mass, or
(ii) purified to a minimum purity of 99.9 percent aluminum by mass.
(B) Antimony Antimony which is—
(i) converted to antimony trisulfide concentrate with a minimum purity of 90 percent antimony trisulfide by mass, or
(ii) purified to a minimum purity of 99.65 percent antimony by mass.
(C) Barite Barite which is barium sulfate purified to a minimum purity of 80 percent barite by mass.
(D) Beryllium Beryllium which is—
(i) converted to copper-beryllium master alloy, or
(ii) purified to a minimum purity of 99 percent beryllium by mass.
(E) Cerium Cerium which is—
(i) converted to cerium oxide which is purified to a minimum purity of 99.9 percent cerium oxide by mass, or
(ii) purified to a minimum purity of 99 percent cerium by mass.
(F) Cesium Cesium which is—
(i) converted to cesium formate or cesium carbonate, or
(ii) purified to a minimum purity of 99 percent cesium by mass.
(G) Chromium Chromium which is—
(i) converted to ferrochromium consisting of not less than 60 percent chromium by mass, or
(ii) purified to a minimum purity of 99 percent chromium by mass.
(H) Cobalt Cobalt which is—
(i) converted to cobalt sulfate, or
(ii) purified to a minimum purity of 99.6 percent cobalt by mass.
(I) Dysprosium Dysprosium which is—
(i) converted to not less than 99 percent pure dysprosium iron alloy by mass, or
(ii) purified to a minimum purity of 99 percent dysprosium by mass.
(J) Europium Europium which is—
(i) converted to europium oxide which is purified to a minimum purity of 99.9 percent europium oxide by mass, or
(ii) purified to a minimum purity of 99 percent by mass.
(K) Fluorspar Fluorspar which is—
(i) converted to fluorspar which is purified to a minimum purity of 97 percent calcium fluoride by mass, or
(ii) purified to a minimum purity of 99 percent fluorspar by mass.
(L) Gadolinium Gadolinium which is—
(i) converted to gadolinium oxide which is purified to a minimum purity of 99.9 percent gadolinium oxide by mass, or
(ii) purified to a minimum purity of 99 percent gadolinium by mass.
(M) Germanium Germanium which is—
(i) converted to germanium tetrachloride, or
(ii) purified to a minimum purity of 99.99 percent germanium by mass.
(N) Graphite Graphite which is purified to a minimum purity of 99.9 percent graphitic carbon by mass.
(O) Indium Indium which is—
(i) converted to—
(I) indium tin oxide, or
(II) indium oxide which is purified to a minimum purity of 99.9 percent indium oxide by mass, or
(ii) purified to a minimum purity of 99 percent indium by mass.
(P) Lithium Lithium which is—
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(i) converted to lithium carbonate or lithium hydroxide, or
(ii) purified to a minimum purity of 99.9 percent lithium by mass.
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(Q) Manganese Manganese which is—
(i) converted to manganese sulphate, or
(ii) purified to a minimum purity of 99.7 percent manganese by mass.
(R) Metallurgical coal Metallurgical coal which is suitable for use in the production of steel (within the meaning of the notice published by the Department of Energy entitled “Critical Material List; Addition of Metallurgical Coal Used for Steelmaking” (90 Fed. Reg. 22711 (May 29, 2025))), regardless of whether such production occurs inside or outside of the United States.
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(e)(1), added subpar. (R) and redesignated former subpars. (R) to (Z) as (S) to (AA), respectively.
(S) Neodymium Neodymium which is—
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(i) converted to neodymium-praseodymium oxide which is purified to a minimum purity of 99 percent neodymium-praseodymium oxide by mass,
(ii) converted to neodymium oxide which is purified to a minimum purity of 99.5 percent neodymium oxide by mass [OLRC note: So in original. Probably should be followed by “, or”.]
(iii) purified to a minimum purity of 99.9 percent neodymium by mass.
(U) Niobium Niobium which is—
(i) converted to ferronibium, or
(ii) purified to a minimum purity of 99 percent niobium by mass.
(V) Tellurium Tellurium which is—
(i) converted to cadmium telluride, or
(ii) purified to a minimum purity of 99 percent tellurium by mass.
(W) Tin Tin which is purified to low alpha emitting tin which—
(i) has a purity of greater than 99.99 percent by mass, and
(ii) possesses an alpha emission rate of not greater than 0.01 counts per hour per centimeter square.
(X) Tungsten Tungsten which is converted to ammonium paratungstate or ferrotungsten.
(Y) Vanadium Vanadium which is converted to ferrovanadium or vanadium pentoxide.
(Z) Yttrium Yttrium which is—
(i) converted to yttrium oxide which is purified to a minimum purity of 99.999 percent yttrium oxide by mass, or
(ii) purified to a minimum purity of 99.9 percent yttrium by mass.
(AA) Other minerals Any of the following minerals, provided that such mineral is purified to a minimum purity of 99 percent by mass:
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(e)(1), added subpar. (R) and redesignated former subpars. (R) to (Z) as (S) to (AA), respectively.
(i) Arsenic.
(ii) Bismuth.
(iii) Erbium.
(iv) Gallium.
(v) Hafnium.
(vi) Holmium.
(vii) Iridium.
(viii) Lanthanum.
(ix) Lutetium.
(x) Magnesium.
(xi) Palladium.
(xii) Platinum.
(xiii) Praseodymium.
(xiv) Rhodium.
(xv) Rubidium.
(xvi) Ruthenium.
(xvii) Samarium.
(xviii) Scandium.
(xix) Tantalum.
(xx) Terbium.
(xxi) Thulium.
(xxii) Titanium.
(xxiii) Ytterbium.
(xxiv) Zinc.
(xxv) Zirconium.
(d) Special rules In this section—
(1) Related persons Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b).
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(2) Only production in the United States taken into account Sales shall be taken into account under this section only with respect to eligible components the production of which is within—
(A) the United States (within the meaning of section 638(1)), or
(B) a possession of the United States (within the meaning of section 638(2)).
(3) Pass-thru in the case of estates and trusts Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
(4) 33 So in original. There are two pars. (4). Sale of integrated components For purposes of this section, a person shall be treated as having sold an eligible component to an unrelated person if such component is integrated, incorporated, or assembled into another eligible component which is sold to an unrelated person.
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(c)(2), added par. (4) relating to restrictions relating to prohibited foreign entities.
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(a), amended par. (4) generally. Prior to amendment, text read as follows: “For purposes of this section, a person shall be treated as having sold an eligible component to an unrelated person if such component is integrated, incorporated, or assembled into another eligible component which is sold to an unrelated person.”
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(4) 3 Restrictions relating to prohibited foreign entities
(A) In general No credit shall be determined under subsection (a) for any taxable year if the taxpayer is—
(i) a specified foreign entity (as defined in section 7701(a)(51)(B)), or needs § 7701(a)(51)(B)
(ii) a foreign-influenced entity (as defined in section 7701(a)(51)(D), without regard to clause (i)(II) thereof).
For purposes of this paragraph, the term “specified foreign entity” means—
For purposes of subparagraph (B), the term “foreign-controlled entity” means—
(B) Effective control In the case of a taxpayer for which section 7701(a)(51)(D)(i)(II) is determined to apply for any taxable year, no credit shall be determined under subsection (a) for such taxable year if such determination relates to an eligible component described in subsection (c)(1).
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(c)(2), added par. (4) relating to restrictions relating to prohibited foreign entities.
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70514(a), amended par. (4) generally. Prior to amendment, text read as follows: “For purposes of this section, a person shall be treated as having sold an eligible component to an unrelated person if such component is integrated, incorporated, or assembled into another eligible component which is sold to an unrelated person.”