Domestic Content Bonus: How to Qualify for the 10% Solar Tax Credit Adder

The domestic content bonus adds 10 percentage points to your solar Investment Tax Credit — turning the base 30% into 40%. For a $30,000 commercial installation, that's an extra $3,000 in tax savings. But qualifying requires meeting specific domestic manufacturing requirements and navigating the FEOC rules. Here's exactly what you need.

What Is the Domestic Content Bonus?

Under Section 48E, projects that use domestically produced materials can claim a bonus credit of 10% on top of the base 30% rate. This was introduced by the Inflation Reduction Act and remains active after the OBBBA. The bonus applies to both the ITC and the PTC.

The Two Requirements

To qualify, your project must meet both of these requirements:

1. Steel and Iron: 100% US-Produced

All steel and iron used in the project must be produced in the United States. This applies to structural steel in ground-mounted systems, racking components, and any other steel or iron elements. The manufacturing process must take place entirely within the US — foreign steel that's merely finished or processed in the US doesn't count.

2. Manufactured Products: Minimum Domestic Content

Manufactured products (panels, inverters, racking, wiring) must meet a minimum percentage of domestic content. The threshold increases over time:

• 2025: 40% of manufactured product cost must be domestic
• 2026: 40% (current)
• 2027: 45%
• 2028+: 55%

For offshore wind projects, the thresholds are lower (starting at 20%). The percentage is calculated based on the cost of domestic components relative to the total cost of all manufactured products.

What Counts as "Domestic Content"

A manufactured product is considered domestically produced if:

• It's manufactured in the United States
• The cost of US-produced components is at least the applicable percentage of the total manufactured product cost

For solar panels, the key components manufactured in the US include the solar cells, glass, backsheet, junction box, and frame. A panel assembled in the US using imported cells may or may not qualify depending on the cost breakdown.

US Panel Manufacturers Most Likely to Qualify

Several manufacturers have significant US production that may qualify for the domestic content bonus:

• First Solar — US-manufactured thin-film panels (Ohio, Alabama facilities)
• Qcells — Georgia manufacturing facility
• Silfab — Washington state manufacturing
• Mission Solar — Texas manufacturing
• Tesla (Panasonic partnership) — New York Gigafactory

Importantly, the specific panel model matters, not just the manufacturer. A company like Qcells produces panels in both Korea and the US — only the US-made models qualify. Always ask for the country-of-origin documentation for the exact model being installed.

The FEOC Interaction

The FEOC (Foreign Entity of Concern) rules add another layer. Even if your panels are manufactured in the US, if the manufacturer is considered a prohibited foreign entity, you may be disqualified from claiming any credit — including the base 30%. The FEOC check must be passed before the domestic content bonus is even considered.

Check your manufacturer's FEOC status using our Tax Credit Eligibility Checker.

Documentation Requirements

To claim the domestic content bonus, you need:

1. Manufacturer's certification — A written statement from the panel manufacturer certifying the percentage of domestic content for the specific model.
2. Cost breakdown — Documentation showing the cost of US-produced components vs. total manufactured product cost.
3. Steel/iron certification — For ground-mounted systems, certification that all structural steel was US-produced.
4. Installer's records — Your installer should maintain all documentation as part of the project file.

The IRS may request this documentation up to 3 years after you file your return. Keep copies of everything.

Is It Worth Pursuing?

The domestic content bonus can add significant value. For a $100,000 commercial installation, the bonus is worth $10,000 in additional tax credit. However, domestic panels often cost 10-20% more than imported alternatives, which may partially offset the bonus value.

For residential lease/PPA arrangements, the installer makes the decision about whether to pursue the bonus — and they factor it into your pricing. Ask your installer whether they're claiming the domestic content bonus and how it affects your payments.

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