On January 16, 2025, the U.S. Department of the Treasury and IRS released updated guidance on the Inflation Reduction Act’s domestic content bonus for Clean Electricity Production and Investment Tax Credits. This update revises the safe harbor table, impacting the way developers calculate eligibility for the bonus.

Key takeaways:

• Domestic Modules Gain, Inverters & Racking Lose: The new Safe Harbor Table significantly boosts incentives for domestic modules while reducing the contribution from inverters and racking.
•  Racking Contribution Adjusted: Rails now contribute 15% (MLPE) or 18.7% (string inverters), with structural fasteners at 3.5%, totaling a max of 19.6% from racking.
• Inverter Contributions Drop: Fully domestic inverters now contribute 24.8%, down from 35.6%.
• Multiple Compliance Paths: The May 2024 table remains valid for projects starting before April 16, 2025, and the Direct Cost Method is still available.

These changes impact solar manufacturers, developers, and installers evaluating domestic content compliance. As policies evolve, EcoFasten will continue providing trusted insights to navigate these updates.*

Contact us today to discuss your project! We’re here to help you maximize your tax credits and ensure you’re ready for future requirements!

*EcoFasten does not provide tax, legal, or accounting advice. Consult professional tax, legal, and accounting advisors for guidance.