Japanese solar manufacturer TOYO Co., Ltd. has announced the results of a third-party compliance analysis of production and sales activity at its Toyo Solar Texas facility. Following the analysis, the company expects its U.S. subsidiary Toyo Solar Texas LLC to be eligible to claim Section 45X Advanced Manufacturing Production Credits for the 2025 tax year.
In a statement to pv magazine USA, Toyo chief strategy office Rhone Resch said the company’s expected 2025 credit would be modest, because the facility began operations late in the year. However, he expects future credits to be more substantial.
“TOYO’s expected Section 45X eligibility is a major milestone and an important validation of our U.S. manufacturing strategy,” Resch said. “Once our planned 2 GW of module capacity and 1.5 GW HJT cell facility are fully ramped, they could generate approximately $200 million annually in Section 45X credits—$140 million from modules and $60 million from cells.”
Tax credit eligibility
To qualify for the Section 45X credit, which was originally established by the 2022 Inflation Reduction Act, a company must produce eligible clean energy components within the United States or its territories and sell them to an unrelated party. The law further requires components to undergo “substantial transformation” at the factory to become eligible for the credits.
The Section 45X tax credit for manufactured solar components is currently 7 cents per watt DC for modules and four cents per watt DC for cells. It is available for all eligible components produced and sold by December 31, 2027.
A planned phase-out of the credit through 2032 was scrapped, and restrictions against the claiming of the credit by so-called “prohibited foreign entities” were added to the rules in 2025’s One Big Beautiful Bill Act.
“TOYO’s underlying business model is built on engineering discipline, manufacturing efficiency and product performance—not dependence on government subsidies,” Resch told pv magazine USA. “Section 45X strengthens that model by providing additional capital that we can reinvest in expanding American manufacturing and accelerating the deployment of advanced HJT technology.”
Toyo expects its utility-scale HJT modules to deliver approximately 20% to 25% higher conversion efficiency than existing thin-film modules, meaning they would produce more power in the same area.
“Even more importantly,” Resch said, “HJT provides a natural platform for integrating next-generation perovskite technology, creating a pathway to tandem solar products with conversion efficiencies well beyond today’s conventional technologies. TOYO is not simply expanding manufacturing capacity—we are building an American platform for the next generation of high-performance solar technology.”
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