Document FEOC-compliant sourcing for a commercial solar project seeking Section 48E tax credit eligibility post-OBBBA

Steps

1. Determine whether the project began construction before December 31, 2025 — if so, it is exempt from Foreign Entity of Concern (FEOC) restrictions entirely for Section 48E purposes
2. If construction begins on or after January 1, 2026, calculate the Material Assistance Cost Ratio (MACR): at least 40% of relevant equipment costs must come from non-FEOC sources in the 2026 program year, with that threshold rising 5 percentage points each subsequent year
3. Build a bill-of-materials-level sourcing record (component origin, manufacturer, cost allocation) sufficient to demonstrate the MACR calculation to tax counsel/auditors, not just a high-level supplier attestation
4. Treat the domestic content bonus credit (a separate, additional ITC adder) as a distinct compliance question from the base-eligibility FEOC/MACR test — do not conflate the two when advising a client, and route specific domestic-content bonus percentage thresholds to current Treasury/IRS guidance and tax counsel rather than asserting a number
5. Re-verify begin-construction documentation standards against IRS Notice 2025-42, since 'begin construction' evidentiary requirements determine both the FEOC exemption and the deadline track under 48E