A new joint white paper finds that aluminum extrusion — the most capital-intensive step in frame production — must occur in the United States for solar module frames to qualify for the Section 45Y/48E domestic content bonus credit
WASHINGTON, D.C. — The Coalition for a Prosperous America (CPA) and the Aluminum Extruders Council (AEC) today released a joint white paper, “Establishing a Standard for U.S.-Manufactured Aluminum Frames,” and submitted it to Treasury Secretary Scott Bessent. The paper urges the Treasury Department and the Internal Revenue Service to issue guidance clarifying that aluminum extrusion must be performed in the United States for a solar module frame to qualify as a U.S.-produced component under the Section 45Y and 48E domestic content bonus credit.
Together, CPA and AEC represent the domestic aluminum producers and workers who make up the overwhelming majority of the industry’s jobs. More than 125,000 Americans work in downstream aluminum segments like extrusion and fabrication — 97% of the industry’s workforce — compared with fewer than 4,000 in primary smelting. That downstream base is exactly who CPA and AEC represent.
The domestic content bonus credit was enacted to rebuild domestic manufacturing capacity and reduce dependence on foreign supply chains. But in the absence of clear IRS guidance, most solar module manufacturers are claiming U.S.-origin frames based solely on cutting to length and punching holes in foreign-extruded aluminum — operations that constitute “mere assembly” under the Buy America Rules that Congress wrote into the statute. The result is that the most significant manufacturing investment, extrusion, continues to occur overseas while companies nonetheless claim the domestic content bonus.
The white paper documents that:
- Extrusion is the most capital-intensive step in frame production — accounting for roughly 61% of manufacturing costs and 52% of capital investment. It is the transformative process that forces a heated aluminum billet through a precision die to create the frame’s engineered cross-section.
- Three independent bodies of law converge on the same conclusion. IRS Notice 2023-38 (which incorporates the federal Buy America Rules), the FTA’s Buy America regulations — which explicitly list “extruding” as an origin-conferring manufacturing process — and the Commerce Department’s AD/CVD scope for aluminum extrusions all identify extrusion, not cutting and punching, as the step that confers U.S. origin.
- The stakes are significant. The domestic content bonus can raise a project’s Investment or Production Tax Credit by 10 percentage points, and the frame can count for 4.0% to 8.5% of a module’s domestic content — enough to be decisive for projects near the qualifying threshold.
- Market practice has fragmented. Independent due diligence found that most U.S. module makers claim domestic frames while performing only fabrication — cutting to length and hole punching — in the United States, with the extrusion dies for their profiles located in Canada and elsewhere abroad.
In their letter to Secretary Bessent, CPA and the Aluminum Extruders Council wrote that “the most significant manufacturing investment, extrusion, continues to occur overseas, while companies nonetheless claim the domestic content bonus.” They urged Treasury to adopt the standard “most faithful to what Congress intended: bringing real, capital-intensive manufacturing back to the United States.”
“Congress created the domestic content bonus to bring real manufacturing back to America — not to reward companies for importing a Chinese-extruded frame and punching a few holes in it in a U.S. warehouse,” said Jon Toomey, President of CPA. “Extrusion is where the capital, the jobs, and the value are. Treasury should state clearly that extrusion has to happen here for a frame to count as American-made.”
As the white paper concludes, “the tax incentive was designed to bring real manufacturing back to the U.S. Extrusion is real manufacturing.” A compliance pathway that lets an importer certify a foreign-extruded profile as a U.S. component after only cutting and punching, the paper states, “does not serve the purpose of the law.”
CPA has long pressed to ensure federal clean-energy incentives build genuine domestic capacity rather than reward foreign production — including through its landmark report on the U.S. solar supply chain and its support for strong Foreign Entity of Concern protections in the One Big Beautiful Bill.
CPA and the Aluminum Extruders Council urged Treasury and the IRS to issue regulations, a revenue ruling, or other guidance clarifying that domestic extrusion is required for an aluminum solar frame to qualify as a U.S.-produced manufactured product component. Clear guidance would level the playing field for manufacturers that have already invested in domestic extrusion, protect compliant taxpayers from legal risk, and give the entire supply chain the certainty it needs to make long-term investment decisions.
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