Crux says U.S. clean energy supply chains still lack key domestic inputs

Crux released a new whitepaper Tuesday arguing that while §45X has helped spur U.S. clean energy manufacturing, the biggest bottlenecks remain upstream and abroad. The report says domestic supply gaps are already raising costs, forcing redesigns, and slowing projects across solar, batteries, and critical minerals.

Why it matters: - U.S. clean energy manufacturing has scaled faster since the 2022 launch of the §45X advanced manufacturing tax credit. - Crux says the main constraint is now upstream, where solar wafers, battery materials, electrical steel, and refined critical minerals still depend heavily on foreign supply. - Those gaps are affecting project timing, costs, and whether manufacturers can build at domestic scale.

What happened: - Crux released “The State of the Clean Economy Supply Chain: Where America Builds, Where It Can't, and What Can Be Done About It” on Tuesday in New York. - The whitepaper analyzes U.S. clean economy supply chains using a 75-respondent industry survey, stakeholder interviews, and U.S. trade data. - The report says onshoring progress has been strongest in final assembly, not in the upstream and midstream inputs needed to support it. - Crux argues that tariffs, export controls, prohibited foreign entity restrictions, and domestic manufacturing incentives are reshaping sourcing patterns. - The report says shifting imports away from China does not automatically mean production returns to the U.S.

The details: - Every $1 of §45X tax credit claimed has been associated with $4.82 of private and public manufacturing investment since Q3 2022, according to the report. - Realized manufacturing investment across solar, batteries, and critical minerals rose from $3.3 billion annually in 2020 to $33.3 billion annually in 2025. - China’s share of U.S. battery import customs value fell from 72% in H1 2024 to 40% in H1 2026. - Japan, South Korea, and Malaysia together rose from 14% to 40% of U.S. battery import customs value over the same period. - 47% of surveyed companies said the lack of a domestic producer, or a producer at sufficient scale, was their single biggest barrier to securing constrained inputs. - Solar module manufacturing has expanded rapidly, but China still controls roughly 95% of global wafer production capacity. - Domestic battery module capacity has scaled, but critical midstream materials have not kept pace. - China accounted for 98% of global LFP cathode material manufacturing in 2025. - 40% of surveyed sourcing organizations said they redesigned or downsized a project or production line in the past year. - 17% said they cancelled or indefinitely delayed a project or production line in the past year. - 93% said supply chain constraints increased their input or compliance costs. - 87% of Crux’s survey respondents ranked manufacturing tax credits, including expanded §45X coverage or new investment tax credits for domestic manufacturing or refining facilities, among the top three most effective policy tools. - Crux says expanded tax credits could help close the cost gap and strengthen domestic manufacturing capacity. - Hasan Nazar, head of policy at Crux, said moving supply chains away from China is not the same as building supply chains in America. - Nazar said the U.S. needs a broader and more durable industrial strategy than production incentives or tariff actions alone. - Crux said the company’s whitepaper is available at the full report.

Between the lines: - The report suggests the policy challenge has shifted from attracting factory announcements to building the intermediate supply base that makes those factories competitive. - Foreign diversification may reduce exposure to China without solving the underlying U.S. capacity gap. - The findings imply that industrial policy can drive investment, but not all stages of the supply chain move at the same speed.

What's next: - Crux is urging policymakers to expand manufacturing tax credits and consider new incentives for domestic manufacturing and refining facilities. - The report suggests future supply chain resilience will depend on whether the U.S. can build enough upstream capacity to match downstream factory growth. - American developers and manufacturers will keep seeking domestic materials and components as energy demand rises, which could intensify pressure for additional policy action.

The bottom line: - §45X helped bring more clean economy manufacturing to the U.S., but Crux says the next bottleneck is the domestic supply chain behind the factories.