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The Foreign Entity of Concern deadline is approaching. After July 4, 2026, solar and battery equipment from certain countries will no longer qualify for IRA tax credits. Here is what it means for homeowners and businesses.
142 days
until deadline
FEOC stands for Foreign Entity of Concern. Under the Inflation Reduction Act (IRA), equipment manufactured by -- or with key components sourced from -- FEOC countries cannot qualify for certain federal tax credits after the deadline. This restriction is designed to reduce reliance on adversarial nations for critical clean energy supply chains.
The FEOC rules primarily affect solar panels, battery cells, inverters, and critical minerals used in clean energy installations.
Equipment manufactured by entities owned, controlled, or headquartered in these countries does not qualify for the domestic content bonus or, in some cases, the base ITC.
The residential ITC (Section 25D) expired on December 31, 2025 under OBBBA. Homeowners who purchase solar with cash or a loan receive $0 federal tax credit regardless of equipment origin. FEOC does not directly change this -- there is no residential tax credit left for FEOC to affect.
Third-party owned residential solar (leases and PPAs) still qualifies for the 30% ITC under Section 48/48E. The leasing company claims the credit -- not the homeowner. To qualify, they must use FEOC-compliant equipment.
Action: If you are signing a solar lease or PPA agreement, ask your installer to confirm that all panels, inverters, and batteries are FEOC-compliant and eligible for the Section 48/48E tax credit.
The 10% domestic content bonus requires non-FEOC equipment. After July 4, projects using FEOC equipment lose this bonus entirely. Combined with other adders, the total ITC at risk is substantial:
Section 48/48E base credit
Requires FEOC-compliant equipment
For qualifying locations
For qualifying projects
Total potential ITC: up to 70%
Without FEOC compliance, the domestic content bonus alone costs 10 percentage points.
Bonus depreciation drops to 20% in 2026 (down from 40% in 2025) and falls to 0% in 2027. Combined with the FEOC deadline, businesses face a rapidly shrinking window to maximize tax benefits on commercial solar projects.
Explore Commercial Solar OptionsThese manufacturers produce equipment domestically or from non-FEOC sources, meeting compliance requirements for the domestic content bonus and ITC eligibility.
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
Note: Equipment availability may tighten as the July 4 deadline approaches. We recommend ordering early to secure FEOC-compliant equipment at current pricing.
Battery storage components from FEOC entities no longer qualify for ITC
Clear rules for calculating manufactured product percentages
Down from 40% in 2025, reducing first-year tax benefit
Projects must BEGIN CONSTRUCTION before this date for current IRA Section 48E rules. Proposed legislation could modify or repeal ITC.
No bonus depreciation available; standard 5-year MACRS only
Higher domestic/non-FEOC content required for manufactured products
Confirm equipment compliance
Verify that your installer is sourcing panels, inverters, and batteries from non-FEOC manufacturers.
Begin construction before the deadline
Commercial projects must demonstrate construction start to lock in current ITC rules.
Lock in MACRS depreciation
Bonus depreciation is 20% in 2026 and drops to 0% in 2027. Act this year.
Order equipment early
Supply of FEOC-compliant equipment may tighten as the deadline approaches. Secure your order now.
Not directly. The residential ITC (Section 25D) expired on December 31, 2025 under OBBBA, so homeowner cash and loan purchases already receive $0 federal tax credit regardless of equipment origin. However, if you are signing a solar lease or PPA, the third-party owner claims the 30% ITC under Section 48/48E and must use FEOC-compliant equipment to qualify. This could affect lease rates and equipment choices.
Major US-manufactured panels include First Solar (Ohio, Alabama, Louisiana), Qcells (Georgia), Silfab Solar (Washington, New York), Meyer Burger (Arizona), and Mission Solar (Texas). These manufacturers produce panels domestically and generally meet FEOC compliance requirements for the domestic content bonus.
Equipment prices may increase as demand shifts toward FEOC-compliant products. Supply constraints for US-made and non-FEOC panels, inverters, and batteries could cause temporary price spikes. Ordering before the deadline ensures access to current pricing and equipment availability.
The domestic content bonus is an additional 10% ITC adder available to commercial solar projects that use equipment manufactured in the United States with non-FEOC components. Combined with the 30% base ITC, this brings 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 commercial projects: absolutely. You need to begin construction before July 4 to lock in current IRA Section 48E rules and the domestic content bonus. MACRS bonus depreciation also drops to 20% in 2026 and 0% in 2027, compounding the urgency. For residential lease/PPA customers, earlier installation ensures your provider can still source FEOC-compliant equipment at competitive rates.
Commercial projects using equipment from FEOC countries (China, Russia, Iran, North Korea) after July 4, 2026 will lose eligibility for the 10% domestic content bonus. The 30% base ITC may still apply, but the project would forfeit a significant financial benefit. For lease/PPA providers, non-compliant equipment could disqualify the entire 30% ITC claim under Section 48/48E.
The FEOC deadline is approaching fast. Whether you are a homeowner considering a lease/PPA or a business planning a commercial installation, acting before July 4 protects your access to tax credits and compliant equipment.