Foreign entity of concern (FEOC) rules deny tax credits for projects that exceed using certain thresholds of Chinese products.
The order tightens the deadline for project tax credit eligibility and orders the Treasury to apply enhanced Foreign Entity of Concern restrictions to imports.
The bill cancelled residential solar tax credits at the end of 2025 and added new timelines and restrictions for tax credits under Sections 45Y and 48E.
Solar and other clean energy industry members react to the passage of the “One Big, Beautiful Bill Act.”
Despite vocal bipartisan support for clean energy tax credits, House and Senate Republicans failed to adjust policies that would continue the rapid build out of domestic clean energy.
Solar industry leader warns that passage of this bill will weaken the U.S. industries that power the economy and strengthen national security.
The latest version of the Reconciliation Bill includes a 30% excise tax on solar projects if its components or intellectual property originate from entities linked to foreign adversaries—even if those projects don’t claim tax credits.
An amendment put forth by Iowa Senator Ernst seeks to extend tax credits and clarify FEOC rules.
Sen. Hickenlooper is expected to ask for a one-year extension, sunsetting the 25D tax credit after 2026.
The $25 billion annual cost of tax credits is far outweighed by the $51 billion in lower electricity bills, $12 billion in federal tax revenue, and $3.7 billion in state and local taxes, found analysis by the Solar Energy Industries Association, Brattle Group, and University of Louisiana.
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