In its infinite wisdom, the Senate Finance Committee went ahead and passed what it lovingly calls the “One Big, Beautiful Bill”- a sweeping budget reconciliation monster that somehow manages to promote American manufacturing, punish geopolitical rivals, and gut the U.S. solar market in the same breath.

Tucked deep inside this legislative nesting doll is a shiny, bureaucratically-scented hand grenade: solar projects using materials, tech, or financing from a “Foreign Entity of Concern” (FEOC) will soon lose access to clean energy tax credits under Sections 48E (ITC) and 45Y (PTC). And yes, FEOC still means anything remotely Chinese.

Did your panels come from Vietnam but use tooling sourced in Shanghai? Sorry. Wiring made in Mexico with Chinese copper? Out. Wafers manufactured anywhere on Earth but derived from Chinese polysilicon? Still screwed. Even a hint of Chinese software, financing, or R&D in the supply chain can now taint your project like it’s carrying a geopolitical virus.

The New ITC Purity Test

Starting in 2026, solar projects will face a tax credit phase-out based on when they “begin construction” — but it’s not the immediate execution-style cutoff many feared. Here’s the updated reality:

• Projects that begin construction in 2025 still qualify for 100% of the tax credit.

• Projects starting in 2026 get 60%.

• Start in 2027, you’re down to 20%.

• And if you start after 2027, congrats - 0%.
  No wiggle room. No appeals. No credits.

And yes, the FEOC ban applies across all of it. So even if you qualify for the credit based on timing, if your panels touched Chinese anything, the IRS has a polite little middle finger waiting for you.

“Begin Construction” — A Moving Target

Historically, developers could qualify under IRS “safe harbor” rules by spending 5% of project costs upfront- usually by purchasing panels or transformers under a binding contract before the deadline. That rule still technically exists. But with a Trump executive order pushing Treasury to tighten those interpretations, expect more scrutiny and fewer loopholes.

Translation: "Buy modules and stick them in a warehouse" may not cut it much longer. If your paperwork isn’t bulletproof — or your project isn’t visibly underway — you may find yourself shut out when it’s time to claim your credit.

Kicking the Ladder While Climbing It

All of this is part of a clear objective: cut China out of the U.S. clean energy economy and reshore solar manufacturing. In theory, it’s noble. In practice? It’s a bit like telling a starving man he can only eat USDA-certified quinoa grown within 300 miles.

More than 80% of the global solar supply chain - from wafers to cells to capital - still has roots in China. And while U.S. manufacturing is finally scaling up, it’s nowhere near ready to shoulder the load. Inventory is tight, pricing is frothy, and timelines are slipping. Fast.

Fallout in Real Time

The effects are already here:

• Residential solar is getting hammered first, with tax credits for rooftop projects phasing out rapidly. Small installers are bracing for a cliff.

• Public solar stocks have cratered, with First Solar, SolarEdge, and Sunrun all taking double-digit losses since the bill passed.

• Congressional infighting has stalled Treasury appointments, with Republican senators holding up confirmations until the IRS pledges not to interpret the law into oblivion.
  In other words, the people who wrote the rules are now worried the IRS might follow them too aggressively.

So, What Can You Do?

Right now you can safe harbor modules to retain this year's ITC. You'll see over 1.1GW of modules that are currently available for Safe Harbor at the link below. Just enter your company email, and hit "Enter Site" and it'll unlock the website for you.