The newly-enacted One Big Beautiful Bill Act (OBBBA) ties the technology-neutral 45Y/48E credits to strict Foreign-Entity-of-Concern (FEOC) limits. Solar projects that start construction in 2026 must show that no more than 40% of the total cost of manufactured products (modules, inverters, trackers, BOS) comes from FEOC sources – a threshold that ratchets up to 60% after 2029.¹

That is a steep hurdle when 70% of the world’s silicon wafers², and 70% of solar cells³ used in U.S. projects, originate from Chinese-owned firms – with limited domestic ingot, wafer, or cell capacity today. Proving “non-FEOC” content now demands airtight documentation from quartz mine to job-site gate.

Fail the test and you lose the credit plus risk a penalty of up to 20% of project cap-ex.

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What Teams Need to Track for FEOC Compliance

Based on the U.S. DOE Solar Photovoltaics Supply Chain Deep Dive Assessment (Treasury compliance still pending), we’ve outlined key supply chain components that may be required for diligence under the new FEOC guidelines:

Where BuildQ Fits In

• Single Source of Truth – BuildQ’s diligence tracker keeps every contract, certificate, and supplier affidavit in one organized workspace, so teams aren’t hunting through email chains when FEOC questions arise.
• Document Intelligence – Uploaded purchase orders and bills of materials are automatically indexed and searchable by supplier, component, and cost tier – laying the groundwork for future FEOC cost-ratio calculations.
• Audit-Ready Version Control – Each document’s revision history lives alongside the financial model and IC memo, giving investors a clear lineage of “who changed what, when” if compliance ever comes under review.
• Visibility Across Functions – Project finance, sourcing, and legal teams share the same live dashboard, reducing last-minute scrambles and ensuring everyone works from the latest data.

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Key Dates & Next Steps

• June 16 2025 – Was the last day for legacy POs to bypass the FEOC test (if COD ≤ 2029).
• Aug 18 2025 (target) – Treasury guidance deadline
  
  
  

1 China Briefing - Dezan Shira & Associates