Do you look for the “Made in USA” imprint when you’re shopping? Nearly two-thirds of U.S. consumers do, according to a 2023 survey, and nearly as many are willing to pay a premium for American-made products.
Why? Because they recognize that purchasing American products means not only getting higher-quality goods, but supporting American industry, promoting American jobs, and contributing to the American economy. It also ensures that products come from manufacturers that follow domestic labor laws and helps reduce transportation emissions associated with long-distance shipping.
These are all good reasons to buy American, but if you’re in the market for solar lighting or other infrastructure, you may actually be required to use products that are manufactured in the U.S. from U.S.-sourced materials. Both the Buy American Act (BAA) and the Build America, Buy America Act (BABAA) frequently apply to solar lighting projects, and it’s important for customers to understand their differences.
In this article, we’ll explain what they are, where they apply, and some recent and upcoming changes to be aware of.
The BAA is often confused and conflated with BABAA—probably because they share many of the same words. However, there are some important differences, starting with the fact that the BAA has been around a lot longer.
Passed by Congress and signed into law by President Hoover in 1933, the BAA was originally intended to kickstart the economy following the Great Depression. It requires the U.S. government to prefer domestic products for ‘direct federal procurement,’ or, as the Made in America Office puts it, “what the Federal government buys for its own use.” (For solar lighting, this includes U.S. military bases, national parks, and correctional facilities.)
There are two criteria a product needs to meet to be BAA-compliant:
Iron and steel—such as the poles used with solar lighting products—have even higher domestic content requirements. For products consisting wholly or predominantly of iron or steel, the cost of foreign elements must be less than 5% of total component costs.
These requirements can be waived under certain circumstances, such as when domestic items aren’t available, or if the cost is deemed ‘unreasonable’. Many countries (including Canada, Mexico, and most of Europe) also have trade agreements that can override the BAA when the contract exceeds a certain threshold. More on that here.
Whereas BAA generally applies to federal procurement, BABAA (often just BABA) applies to infrastructure projects supported by federal financial assistance, including the Community Development Block Grant and Safe Streets and Roads for All Grant. This effectively expands the BAA’s scope to state and local projects, including common solar lighting applications like streets, trails, and parks.
BABAA is also a much more recent invention. Enacted by President Biden as part of the Infrastructure, Investment and Jobs Act (IIJA)—AKA the Bipartisan Infrastructure Law (BIL)—in November 2021, it requires that all iron, steel, manufactured products, and construction materials used in federally funded projects be produced in the U.S.
Under BABAA, items purchased for use in a covered infrastructure project (i.e., “projects with public functions,” including roads and highways) must meet the following requirements:
Like BAA, BABAA includes a waiver process, which allows agencies to waive the above requirements if a project meets certain criteria (see here).
As if BAA and BABA weren’t confusing enough, there are also several agency-specific requirements commonly referred to as “Buy America.” There is no single Buy America Act; instead, separate laws apply to certain federally funded transportation and infrastructure programs. For example, FHWA has Buy America requirements for Federal-aid highway projects, while FTA and FAA administer their own domestic sourcing requirements.
The quickest way to know your project is subject to BAA/BABA requirements is to check the project specifications and funding source. Direct federal procurements may be subject to the BAA, while infrastructure projects supported by federal grants or loans may be subject to BABA or other agency-specific Buy America requirements. Because the rules vary by funding program, the applicable agency or contracting authority should be able to confirm the requirements for a specific project.
Still have questions? Ask us!
