The statement, distributed on March 28, noted that U.S. subsidies favor domestic production of renewable energy and electric vehicles over imported goods and "discriminate against goods originating in China in violation of the 1994 General Tariff and Trade Act." Agreement, the Agreement on Trade-Related Investment Measures and the Agreement on Subsidies and Countervailing Measures."

The dispute involves five IRA subsidies (1 electric vehicle + 2 ITC + 2 PTC), including the energy property investment tax credit (ITC) for projects started before January 1, 2025 and the energy property investment tax credit (ITC) for projects started before January 1, 2024. Clean power investment tax credits for projects that come online later.

The basic tax credit under both ITC programs is 6% of the investment in qualifying energy properties.

In addition to the two ITC programs for renewable energy, there are also two Production Tax Credit (PTC) programs involved: The Renewable Energy Power Production Tax Credit is applicable to project power generation from projects started before January 1, 2025, for a period of 10 years; the clean power production tax credit is applicable to project power generation that will be put into operation after December 31, 2024, for the same period of 10 years.

The base credit for both PTC programs is $0.03/kW (adjusted for inflation). Three major trends in U.S. solar energy: localization, more restrictions on Chinese companies, and tax credits

The statement stated that subsidies that violate the World Trade Organization Agreement, including subsidies that are conditional on the use of domestically produced goods rather than imported goods, or that otherwise discriminate against imported goods, are still prohibited and may undermine International cooperation in mitigating the effects of climate change. The subsidies involved in this consultation request fall into this category.

Both ITC and PTC tax credits include additional subsidies, depending on the usage of domestic products such as solar modules and other components. If the domestic content requirements of the ITC and PTC schemes are met, the tax credit can be increased by 10% respectively.

Whether it is ITC or PTC tax credits, the requirements for domestic content are similar, that is, building materials must use 100% domestic steel and iron, and manufactured products, including photovoltaic modules, need to be 40% in the United States. produced. For projects starting construction after the end of 2025, this proportion will increase to 55%.

According to the WTO, the WTO dispute settlement process began based on the Chinese representative's request to correct the discriminatory subsidies of the U.S. IRA.

According to regulations, WTO member countries can lodge complaints if they suffer trade discrimination among member countries. The first stage of the appeal requires both parties to negotiate, and the country concerned is obliged to negotiate with the complaining country within 30 days.

Days before China's request for consultations at the WTO, two U.S. senators, Jon Ossof and Raphael Warnock, urged the U.S. administration of President Joe Biden to support domestic solar manufacturing and remove the current tariff exemption for bifacial modules, which account for 5% of PV production. Nearly 90% of components are imported.

Additionally, the Alliance of American Solar Manufacturers recently released a report investigating the United States' reliance on Chinese-made components, calling for "strengthening the domestic supply chain to produce solar components."trina solar panels