The 30% Solar Tax Credit + 10% Domestic Content Bonus, Explained for Buyers
For business-owned solar projects — including third-party-owned residential systems — the federal investment tax credit (ITC) is worth 30% of eligible project cost, and qualifying American-made equipment can add a 10-point domestic content bonus for 40% total. For homeowners buying outright, the separate residential credit (Section 25D) ended for expenditures after December 31, 2025 — so in 2026, ownership structure and construction timing decide everything.
Here’s how the credit works, what changed in 2025, what “domestic content” actually requires, and the equipment we stock that carries manufacturer domestic-content certification.
This is general information, not tax advice. Credit rules changed substantially in 2025 and IRS guidance continues to evolve. Confirm eligibility, deadlines, and documentation for your specific project with a qualified tax professional before you rely on any credit.
The Two Credits People Mix Up
“The solar tax credit” was actually two different credits, and knowing which one applied to you is the whole game:
Section 25D — Residential Clean Energy Credit
The credit homeowners claimed when they bought their own system: 30% of cost, including DIY equipment purchases (though never your own labor). Ended for expenditures after December 31, 2025 under the July 2025 budget law. The domestic content bonus never applied to this credit.
Section 48E — Clean Electricity Investment Credit
The business credit: 30% of eligible cost for qualifying projects owned by businesses — commercial rooftops, farms, developers, and companies that lease systems to homeowners. Still available, with new deadlines, and it’s where the 10% domestic content bonus lives.
What Changed in 2025 (and Why Deadlines Now Rule)
- The July 2025 budget law ended the Section 25D residential credit for expenditures after December 31, 2025.
- For the business credit, wind and solar face compressed timelines: projects that began construction by July 4, 2026 generally keep the prior rules, while later projects generally must be placed in service by December 31, 2027 to qualify.
- New foreign-entity-of-concern (FEOC) sourcing restrictions apply to projects beginning construction after 2025 — another reason equipment origin now matters beyond the bonus.
- IRS guidance on “beginning of construction” and domestic content percentages continues to be refined — verify current guidance before committing capital.
How the 30% Investment Credit Works
For a qualifying business-owned project, the credit equals 30% of the eligible basis — generally the equipment (panels, inverters, racking, wire, storage), installation labor, and directly related soft costs. It offsets federal income tax rather than being refunded as cash, with carryforward available, and the IRA added two flexibility valves: transferability (selling the credit to another taxpayer) and elective pay for certain tax-exempt owners. The 30% rate assumes prevailing wage and apprenticeship requirements are met or the project is small enough (under 1 MW AC) to be exempt from them.
Bonuses stack on top of the 30%: +10 points for domestic content (below), and +10 for qualifying energy-community locations — which is how well-placed, well-sourced projects reach 40–50%.
The 10% Domestic Content Bonus, In Plain English
The bonus adds 10 percentage points to the investment credit when a project’s hardware is sufficiently American-made. Two tests apply:
- Steel and iron: 100% of structural steel and iron (think racking foundations and structural components) must be U.S.-produced.
- Manufactured products: a minimum share of the total manufactured-product cost (panels, inverters, batteries, and their components) must come from U.S. manufacturing. The threshold steps up by construction-start year — 45% for projects that began in 2025, 50% in 2026, 55% after.
In practice, buyers don’t compute this from scratch — manufacturers publish domestic content certifications and cost data for specific SKUs, and the project’s tax preparer runs the percentage math. Your job at purchase time is simpler: buy SKUs that carry certification and keep the paperwork. That’s why we flag them explicitly.
Domestic-Content-Eligible Equipment We Stock
Every product below ships with manufacturer domestic-content documentation and is flagged with the Domestic Content Eligible badge on its product page:
| Product | Category | Price |
|---|---|---|
| Qcells 430W All Black Solar Panel — Domestic Content Eligible | Solar panel | $376.25 |
| SEG Solar 440W All Black Solar Panel — Domestic Content Eligible | Solar panel | $286 |
| VSUN 440W All Black Solar Panel — Domestic Content Eligible | Solar panel | $279 |
| Axitec 590W Silver Frame Solar Panel — Domestic Content Eligible | Solar panel | $324.50 |
| Enphase IQ8HC Domestic Content Microinverter | Microinverter | $274.12 |
| Enphase IQ8P-3P Domestic Content Microinverter | Microinverter (3-phase) | $194.22 |
| Enphase IQ Battery 5P Kit — Domestic Content Eligible | Battery storage | $4,125.61 |
Prices are pulled live from the Pyra Solar catalog and refreshed hourly. Click any part to see current stock.
Browse the full domestic content collectionA Worked Example (Illustrative Only)
A small business installs a qualifying rooftop system with an eligible basis of $30,000 — equipment, labor, and permitting.
- Base investment credit (30%)$9,000
- With domestic content bonus (40%)$12,000
- Value of qualifying equipment choices$3,000
Illustrative math only — actual eligibility depends on ownership structure, construction-start date, wage/apprenticeship compliance, sourcing rules, and the domestic-content percentage of the whole project. A tax professional should confirm every number before you count on it.
What to Keep in the File
- Itemized invoices and proof of payment for every component.
- Manufacturer domestic-content certification letters for each flagged SKU.
- Records that establish your construction-start date (contracts, permits, delivery receipts).
- Interconnection approval and permission-to-operate paperwork.
- Prevailing wage / apprenticeship records for projects large enough to need them.
Frequently Asked Questions
Can homeowners still claim the 30% solar tax credit in 2026?›
The separate residential credit (Section 25D) ended for expenditures made after December 31, 2025 under the July 2025 budget law, so a homeowner buying a system outright in 2026 generally cannot claim it. Homeowners may still benefit indirectly through third-party ownership (a lease or power purchase agreement), where the business owner of the system claims the investment credit. Timing and structure matter enormously here — confirm your specific situation with a tax professional.
Who can claim the 30% investment tax credit now?›
Businesses that own solar projects — including installers, developers, commercial building owners, farms, and third-party owners of residential systems — under Section 48E, subject to construction-start and placed-in-service deadlines and new sourcing (FEOC) restrictions. The credit is generally 30% of eligible project cost for qualifying projects.
How does the 10% domestic content bonus work?›
Projects claiming the business investment credit can earn an additional 10 percentage points (30% → 40%) if the project meets domestic content rules: 100% U.S.-made structural steel and iron, and a minimum share of manufactured-product costs from U.S. manufacturing — a threshold that steps up by construction-start year (45% for 2025 starts, 50% for 2026, 55% after). Manufacturer certifications document which products count.
Is the tax credit refundable?›
Generally no — it offsets tax owed, with carryback and carryforward rules for businesses. Certain tax-exempt entities can use elective (direct) pay, and businesses can sell (transfer) credits to third parties under IRA transferability rules. All three paths have their own filing requirements, so involve a tax professional early.
Do batteries qualify for the credit and the bonus?›
Standalone and paired battery storage qualifies for the business investment credit, and domestic-content-eligible batteries — like the domestic content version of the Enphase IQ 5P — can count toward the bonus calculation for qualifying projects.
What documentation should buyers keep?›
Itemized invoices, proof of payment, the manufacturer's domestic content certification letters for each eligible product, records establishing your construction start date, and interconnection/PTO paperwork. Your tax preparer will thank you.
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