Can Solar Developers Still Claim Tax Credit, Including Domestic Content?
Solar projects that will be placed in service by the end of 2027 OR that already safe harbored by establishing beginning of construction before July 4, 2026 are still eligible for the ITC and the domestic content bonus. Because they are safe harbored, some ongoing projects may have up to four years left to be placed in service and still claim ITC and domestic content credits.
Projects that will not meet the above criteria will not be eligible to claim the ITC or its associated bonus credits. Projects that do plan to claim any ITC credits must, effective this tax year, meet the new Foreign Entity of Concern rules established in the OBBBA. Utilizing domestically-made solar equipment is one way to meet established FEOC standards.
Does Domestic Content Sill Matter Without the Solar ITC?
The 10% tax credit bonus was a big financial reason to prioritize domestic content. Even though that credit has been largely phased out, choosing US-made solar equipment can still have significant economic benefits for large-scale solar projects. Significant changes to import tariffs went into effect this year—the safest way to avoid paying these penalties is relying on domestic content.
Section 232 and 301 Solar Tariffs
Effective December 4, 2026, mandatory Minium Import Pricing will be effective on all polysilicon imports, unless negotiated otherwise by the Secretary of Commerce. A 15% ad valorem tariff is also effective on polysilicon derivative products.
Pre-existing tariffs under Section 301 may also apply to imports from more than 60 countries. Sourcing domestically-manufactured equipment can prevent triggering all or most of these tariffs.
More details available in this article.
The Department of Commerce has continued to launch new AD/CVD investigations and announced new penalties this year for imports from countries found to be in violation. The past two years have brought increasingly frequent policy changes, with a focus on boosting domestic manufacturing. Solar projects that use domestic content steer clear of penalties.
How Solar Developers Can Source Domestic Content Equipment
Kinect Solar helps developers navigate changing tax incentive requirements while securing equipment and logistics support. Contact us for:
- Evaluating solar module availability
- Assessing tariff exposure risk
- Planning project procurement
- Help with supply chain challenges, including securing and storing equipment on tight timelines
- Posted in Featured, Regulation, Solar Industry, Solar Panels
- Tagged in Domestic content, Investment Tax Credit (ITC), solar imports, Solar Policy, solar tariffs