Supply Chain Woes Strain Solar Industry’s Use of New Tax Breaks

A clash pitting the lack of US-sourced materials against a made-in-America provision required for adding an extra boost to lucrative new tax credits has developers in the solar industry unsure of the impact for potentially billions of dollars in new clean-energy projects.

Private developers are banking on the credits to make their projects more profitable. Public power utilities have warned their planned projects are at “significant risk” if federal agencies won’t let them claim the credits codified in last summer’s Inflation Reduction Act.

The biggest obstacles: The most commonly used type of solar panel is produced in stages, and there ...