South Korea has extended investment tax credits to solar module manufacturing facilities meeting carbon footprint thresholds, in the latest step in a policy trajectory that increasingly uses procurement and tax measures to support domestic manufacturers.
Image: Hyundai Energy Solutions
South Korea has expanded its tax support framework for low-carbon solar module manufacturing, clarifying that facilities producing PV modules with carbon emissions at or below 655 kg CO₂/kW are eligible for investment tax credits under revised enforcement rules that took effect April 1.
The Korea Photovoltaic Industry Association (KOPIA) told The Electric Times this week that the revision covers the full production ecosystem rather than individual processes, adding that it provides a basis for domestic companies with strong technological capabilities to compete on quality and carbon performance rather than price. The South Korean energy trade publication reported that the changes are intended to increase incentives for domestic manufacturers to adopt low-carbon production processes and secure high-efficiency technologies.
The revisions also expand eligibility to solar module design and manufacturing facilities meeting specified carbon thresholds. The revised rules specify eligible manufacturing equipment across the full solar value chain – polysilicon production facilities, silicon wafer manufacturing equipment, solar cell lines, and module production lines – rather than targeting single processes or specific products.
South Korea has applied carbon grading to public solar procurement since at least 2019, when the government first moved to preference low-carbon, high-efficiency modules in project tenders. The system classifies modules into three tiers by lifecycle CO₂ emissions per kilowatt of capacity, with the lowest-emission products receiving the highest grade and preferential treatment in Renewable Portfolio Standard (RPS) auctions. Chinese-origin modules typically fall into the lowest tier. The new tax credit rules extend the same carbon-threshold logic from procurement into the manufacturing investment framework.
Chinese solar cells accounted for 95% of South Korea’s market in 2024, up from 38% in 2019, according to South Korean media reports citing data from the Ministry of Trade, Industry and Energy (MOTIE), leaving domestic manufacturers with a 4% share.
In October 2025, South Korea’s National Institute of Technology and Standards (KATS) introduced new national standards for photovoltaic-thermal (PVT) solar panels. The government-run agency said the new standards apply to modules that combine photovoltaic and solar thermal technologies in a single device, noting that separate standards for each technology already exist.
“This regulatory improvement system accelerates the development of certification standards for new products that cannot be certified under existing systems due to a lack of appropriate standards,” KATS said in a statement. “The move is also intended to help domestic manufacturers enter this emerging market.”
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