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The FEOC solar deadline is July 4, 2026. Solar projects using domestically manufactured panels (like Silfab) qualify for an extra 10% ITC bonus under Section 48/48E, bringing the total commercial credit from 30% to 40% or higher. Projects must begin construction before the deadline.
122 days
until deadline
FEOC stands for Foreign Entity of Concern. It is a designation created under the Inflation Reduction Act (IRA) and refined by Treasury Department guidance to restrict federal clean energy tax credits from flowing to equipment manufactured by adversarial nations.
In practical terms, FEOC means that solar panels, battery cells, inverters, and critical minerals sourced from companies headquartered in, owned by, or controlled by entities in China, Russia, Iran, or North Korea cannot qualify for the 10% domestic content bonus under Section 48/48E of the Internal Revenue Code. The goal is to reduce American dependence on adversarial supply chains for critical energy infrastructure.
This does not mean Chinese-made panels are banned. You can still purchase and install them. They simply do not qualify for the additional 10% ITC bonus. The base 30% credit may still apply to commercial projects using non-compliant equipment, but the domestic content adder is lost.
Equipment manufactured by entities owned, controlled, or headquartered in these countries does not qualify for the domestic content bonus.
The IRS recognizes two methods for establishing that construction has begun. You only need to satisfy one:
Pay at least 5% of the total project cost before July 4, 2026. This is the most common method because it is straightforward to document. Sign a contract with your installer, put down a deposit of at least 5%, and retain all receipts and contracts.
Begin significant physical work of a nature that is integral to the project (e.g., mounting rail installation, foundation work, panel placement). Preliminary activities like permitting, site clearing, and engineering studies do not count.
Important: After beginning construction, you must place the system in service within 4 years (by July 4, 2030) under current IRS continuity requirements.
The domestic content bonus is one of four "adders" that stack on top of the 30% base ITC under Section 48/48E. Together, qualifying commercial solar projects can reach up to 70% total ITC -- but only if FEOC-compliant equipment is used.
| Bonus | Amount | Requirement |
|---|---|---|
Base ITC (Section 48/48E) | 30% | Any qualifying commercial or third-party owned solar project |
Domestic Content (FEOC) | +10% | US-manufactured or non-FEOC equipment (panels, inverters, batteries) |
Energy Community | +10% | Project located in a qualifying brownfield, coal closure, or fossil fuel census tract |
Low-Income Community | +10-20% | Located in a low-income community or serving low-income households (10%); on Indian land or in qualified low-income residential building (20%) |
| Maximum Total | 70% | All bonuses stacked — requires FEOC compliance |
A 100 kW commercial installation at $1.60/W costs $160,000 before incentives.
Without domestic content bonus, the same project would receive $64,000 -- a loss of $16,000.
Beyond the FEOC deadline, MACRS bonus depreciation is shrinking rapidly. Businesses that act in 2026 can still capture 20% bonus depreciation on top of the ITC.
Standard 5-year MACRS still applies after 2027, but the first-year write-off is dramatically smaller without bonus depreciation.
FEOC compliance depends on where a panel is manufactured and whether the manufacturer is owned or controlled by an FEOC entity. Here is how NuWatt's three panel tiers compare:
| Panel | FEOC Compliant? | Manufacturing Origin | 10% Bonus | Propel Eligible |
|---|---|---|---|---|
| Silfab 440W | Yes | Washington & New York, USA | Yes (+10%) | Yes (required) |
| Hyundai 440W | No | South Korea / China supply chain | No | No |
| REC 460W | No | Singapore / Norway HQ | No | No |
Note: Non-compliant panels are not banned. They can still be installed, but the project forfeits the 10% domestic content bonus.
First Solar
Ohio, Alabama, Louisiana
Qcells
Georgia
Silfab Solar
Washington, New York
Meyer Burger
Arizona
Mission Solar
Texas
Enphase Energy
Multiple US locations
SolarEdge
Texas, Florida
Tesla
California, New York
IronRidge
Roof Mount
Unirac
Roof & Ground Mount
GameChange Solar
Ground Mount & Tracker
Array Technologies
Single-Axis Tracker
Supply warning: Demand for FEOC-compliant equipment is surging as the July 4 deadline approaches. Lead times for Silfab, First Solar, and Qcells panels have stretched to 8-12 weeks in some markets. Order early to secure inventory at current pricing.
Businesses, nonprofits, schools, farms, and municipalities that own their solar systems directly. They claim the ITC on their federal tax return under Section 48/48E.
Third-party financing companies that own residential or commercial solar systems and lease them to customers. The system owner (the financing company) claims the ITC under Section 48/48E -- not the homeowner or end user.
Individual homeowners who purchase solar with cash or a loan cannot claim any federal ITC. Section 25D expired December 31, 2025 under OBBBA. There is no residential solar tax credit left for FEOC to affect.
Homeowners buying cash or loan: FEOC does not apply to you. Your federal tax credit is $0 regardless of which panels you choose.
If you are considering a solar lease or PPA (like NuWatt's Propel program), the financing company needs FEOC-compliant equipment to claim the 30% ITC. Here is what that means for you:
With 122 days remaining, here is the step-by-step process to lock in the domestic content bonus:
Contact NuWatt for a site assessment and project proposal. We will model your ITC eligibility including all applicable bonuses.
Choose Silfab 440W panels and other domestically manufactured components. We handle equipment sourcing and compliance documentation.
Execute a binding construction contract and pay at least 5% of total project cost. This satisfies the IRS safe harbor test for "beginning construction."
Retain all contracts, invoices, and proof of payment. Your tax advisor will use these records to substantiate the safe harbor claim on your return.
Finish the installation at your own pace. The IRS requires that you place the system in service within 4 years of beginning construction (by July 4, 2030).
FEOC battery restrictions take effect
Battery storage components from FEOC entities no longer qualify for ITC
PassedIRS finalizes domestic content guidance
Clear rules for calculating manufactured product percentages
PassedMACRS bonus depreciation drops to 20%
Down from 40% in 2025, reducing first-year tax benefit
PassedIRA construction start deadline
Projects must BEGIN CONSTRUCTION before this date for current IRA Section 48E rules. Proposed legislation could modify or repeal ITC.
MACRS bonus depreciation drops to 0%
No bonus depreciation available; standard 5-year MACRS only
FEOC threshold increases to 50%
Higher domestic/non-FEOC content required for manufactured products
Manufactured in Washington and New York, Silfab panels are 100% North American made. They meet all FEOC compliance requirements and qualify for the 10% domestic content ITC bonus.
NuWatt's Propel program is a third-party ownership model where a financing company owns the system, claims the ITC under Section 48/48E, and passes savings to the homeowner through lower monthly payments.
NuWatt designs, installs, and manages commercial solar projects with full FEOC-compliant equipment sourcing. We handle compliance documentation, safe harbor paperwork, and utility interconnection.
The FEOC solar deadline is July 4, 2026. Projects using equipment from Foreign Entities of Concern (China, Russia, Iran, North Korea) that begin construction after this date will not qualify for the 10% domestic content bonus under Section 48/48E of the Internal Revenue Code.
FEOC stands for Foreign Entity of Concern. For solar, it means panels, inverters, and batteries manufactured by companies headquartered in, owned by, or controlled by entities in China, Russia, North Korea, or Iran do not qualify for the 10% domestic content ITC bonus. The equipment is not banned — it simply loses the bonus credit.
FEOC-compliant panels are manufactured in the US or by non-FEOC entities. Major compliant manufacturers include Silfab Solar (Washington & New York), First Solar (Ohio, Alabama, Louisiana), Qcells (Georgia), Meyer Burger (Arizona), and Mission Solar (Texas). NuWatt offers Silfab 440W panels as our FEOC-compliant tier.
Only indirectly. The residential ITC (Section 25D) expired December 31, 2025 under OBBBA, so homeowners buying solar with cash or a loan receive $0 federal tax credit regardless of equipment origin. However, if you are signing a solar lease or PPA, the third-party financing company claims the ITC under Section 48/48E and must use FEOC-compliant equipment to qualify. This can affect lease rates and equipment choices.
The domestic content bonus is an additional 10% ITC on top of the 30% base credit, bringing the total to at least 40%. Projects may also qualify for the 10% energy community bonus and 10-20% low-income adder, reaching up to 70% total ITC for qualifying commercial solar installations.
Begin construction means either the 5% safe harbor test (paying at least 5% of total project cost before July 4, 2026) or the physical work test (starting significant physical work on the project). The 5% safe harbor is more commonly used because it is straightforward to document — sign a contract, put down 5% deposit, and retain records.
Yes. You can still install solar after July 4, 2026, but you will not qualify for the 10% domestic content bonus unless you began construction before the deadline. The 30% base ITC under Section 48/48E remains available for qualifying commercial and third-party owned projects, subject to future legislative changes.
Yes. NuWatt offers the Silfab 440W solar panel, which is manufactured in Washington and New York. Silfab panels are fully FEOC-compliant and qualify for the 10% domestic content bonus. Our Propel financing program requires Silfab panels specifically because FEOC compliance is mandatory for the third-party ITC claim.
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The FEOC construction start deadline is July 4, 2026. Whether you are a business planning a commercial installation or exploring lease/PPA options, acting now secures the domestic content bonus and current equipment pricing.