According to foreign media reports, U.S. Senator Joe Manchin and Democrats have reached an agreement on a settlement bill, which is called the "Reducing Inflation Act of 2022". The bill includes $370 billion in spending on renewable energy and climate measures, a surprise victory for the photovoltaics and cleantech industries.

One of the most influential provisions of the act is the long-term extension of the investment tax credit, which has played an important role in the development of the U.S. photovoltaic industry. The bill calls for a 10-year extension of the 30 percent investment tax credit available for PV systems, before gradually dropping to 26 percent by 2033 and 22 percent by 2034. The tax credit applies to entities and individuals that employ photovoltaic technology.

In addition, the 30% investment tax credit also applies to energy storage systems, whether co-located or independently deployed.

One measure the industry hopes the U.S. government will take is a "refundability" clause, but that measure isn't in the bill. Refundability means that if the tax credit is worth more than the tax owed for the year, it will be paid out as a cash refund. This provision is not included, which hinders the credit worthiness of certain individuals, however the tax credit can be deferred to the next year.

There are also several "additions" to tax credits, depending on the type of organization, domestic product use, and project location. For some projects, investment tax credits can be as high as 50%, according to ROTH Capital Partners.

The credit also includes a "direct payment" provision. This will allow PV developers with little or no tax liability to treat the credit amount as an overpayment of tax, and they will receive a cash refund.

Abigail Ross Hopper, president of the American Photovoltaic Industry Association, said: "With long-term incentives for the deployment and manufacture of clean energy generation facilities, the U.S. photovoltaic and energy storage industries will create hundreds of thousands of new jobs and start building American energy. The next era of leadership. This is a critical opportunity we cannot afford to miss, and now the U.S. Congress must reach a deal and pass this legislation.”

The bill is expected to go to the U.S. Senate for a vote as early as next week.