U.S. solar manufacturers are prodding the Biden administration to toughen the rules on a law that gives a 10% tax credit solar project developers who use materials made in the U.S.A.

The administration sought to encourage investment in clean energy and deter reliance on Chinese goods through the 2022 Inflation Reduction Act, which requires that 40% of the cost of a developer’s materials comes from U.S.-manufactured solar products.

But the Solar Energy Manufacturers for America Coalition (SEMA) said developers can reach that 40% requirement just by buying U.S.-made mounting racks and inverters, and then purchasing the solar panels overseas, Reuters reported.

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SEMA also said the situation undermines the administration’s goals of building a robust solar supply chain to compete with China because solar panels are more difficult and expensive to produce than the other components.

Price Action: Solar panel manufacturers trended downward by Wednesday’s late-morning trading.

Enphase Energy, Inc. (NASDAQ:ENPH) declined 4.36% to $111.10, while Brookfield Renewable Partners L.P. (NYSE:BEP) slid 2.78% to $25.19 and Sunrun Inc. (NASDAQ:RUN) dipped 2.49% to $16.85.

Exchange-traded funds that hold shares of Enphase, which has the largest market capitalization of $17.1 billion, according to Forbes Advisor, also fell by late morning on Wednesday.

Invesco Solar ETF (NYSE:TAN) fell 3.06% as Global X Solar ETF (NASDAQ:RAYS) declined 1.60% and Virtus Duff & Phelps Clean Energy ETF (NYSE:VCLN) dropped 1.18%. First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ:QCLN) shed 3.24% and iShares Global Clean Energy ETF (NASDAQ:ICLN) declined 1.92%.

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Photo: Andreas from Pixabay