The U.S. Department of the Treasury and the IRS on Jan. 16 released additional guidance on the Inflation Reduction Act’s domestic content bonus for the clean energy production and investment tax credits.
The notice updates and provides various clarifications to the domestic content safe harbor that Treasury and the IRS published in May 2024, which provides clean energy developers the option of relying on DOE-provided default cost percentages (in lieu of obtaining direct cost information from suppliers) in determining eligibility for the domestic content bonus.
The notice maintains that option and additionally establishes optional, alternative cost percentages that allow taxpayers to better access the domestic content bonus amounts if they use solar cells manufactured with domestically produced wafers.