What is the Domestic Content Adder?

 In May 2024, the U.S. Department of the Treasury and Internal Revenue Service (IRS) released additional guidance on the Inflation Reduction Act’s Domestic Content Bonus to provide additional incentives for companies making the to switch to cleaner energy with American-made products. Ultimately, the Domestic Content Bonus is an incentive program designed to encourage the use of American-made materials in commercial solar projects. By meeting specific criteria, your project can qualify for significant financial benefits. We will summarize the benefits below, and you can reference the Domestic Content Safe Harbor Notice released by the IRS for full details. Our Business Development team is also available to answer any questions and can provide a free energy audit to evaluate the solar incentives available for your commercial property. 

Qualifications for the Domestic Content Adder

To qualify for this program, your solar project needs to meet the following requirements:

Structural Components

100% U.S.-Produced Steel or Iron: All steel or iron used in structural components such as canopies, racking systems, and mechanical attachments must be produced in the United States.

Manufactured Products

Required Percentage of U.S.-Produced or Manufactured Products: This includes photovoltaic (PV) electrical components like modules, microinverter and power electronics (MLPEs), inverters, etc. 

• 40% for all projects beginning construction before 2025.
• 45% for projects beginning construction in 2025.
• 50% for projects beginning construction in 2026.
• 55% for projects beginning construction after 2026.

Financial Benefits

If your project meets the necessary qualifications, you are eligible for a 10% increase in the value of the Investment Tax Credit (ITC) or the Production Tax Credit (PTC) –  boosting it from 30% to 40%. Plus any additional bonus credits you may qualify for.

 

Why Consider the Domestic Content Adder?

Implementing the Domestic Content Adder on your solar project not only supports American manufacturing but also provides significant financial gains. Here’s why it’s beneficial:

Increased Return on Investment:

Take advantage of the 10% boost in credits to improve your project’s financial benefits

Support for Local Economy:

Contributing to the local economy by sourcing materials and components from U.S. producers.

Enhanced Project Value:

By using high-quality American-made materials, you ensure the durability and reliability of your solar installations.

Conclusion

Leveraging the Domestic Content Adder allows businesses to maximize their investments in solar energy while contributing to the growth of the U.S. manufacturing industry. Ensure your project meets the structural and manufacturing requirements by working with our team at Solar Technologies. 

For more information and personalized guidance, contact Solar Technologies today. Let’s make your transition to renewable energy both profitable and sustainable.