{"id":12228,"date":"2025-07-17T22:44:05","date_gmt":"2025-07-17T22:44:05","guid":{"rendered":"https:\/\/www.solar.com\/learn\/?p=12228"},"modified":"2025-07-17T22:44:05","modified_gmt":"2025-07-17T22:44:05","slug":"what-in-the-feoc-is-going-on-solar-and-foreign-entity-of-concern-rules-in-the-obbb","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/what-in-the-feoc-is-going-on-solar-and-foreign-entity-of-concern-rules-in-the-obbb\/","title":{"rendered":"What in the FEOC is Going On? Solar and &#8220;Foreign Entity of Concern&#8221; Rules in the OBBB"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">With Trump\u2019s <a href=\"https:\/\/www.solar.com\/learn\/trumps-one-big-beautiful-bill-is-now-law-how-it-impacts-solar\/\" target=\"_blank\" rel=\"noopener\">One Big Beautiful Bill signed into law<\/a>, there\u2019s been a lot of discussion\u2014and confusion\u2014about what \u201cFEOC\u201d is, and how it will impact the US solar industry.<\/span><\/p>\n<h2><b>What is FEOC?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">FEOC is an acronym meaning \u201cForeign Entity of Concern\u201d and is the DC way of saying companies that have ties to North Korea, Russia, Iran, or China. Inserting FEOC prohibitions and language in the One Big Beautiful Bill now gives legislatures a vehicle to place future restrictions on companies with ties to those countries without going line by line and modifying text.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For the purposes of the solar industry, the only country amongst the FEOC group that has any consequence is China, which controls a significant portion of solar manufacturing. Reviewing import data highlights that the US receives next to no solar modules or cells from China, but rather from Chinese companies operating in other countries around the world. And, more importantly, a lot of Chinese companies have established US manufacturing.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">One of the fundamental goals of the FEOC restrictions is to minimize US taxpayer support of Chinese companies.\u00a0<\/span><\/p>\n<h2><b>How FEOC Regulations Work for Solar<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">There are two sides to FEOC regulations. Think of them as supply (manufacturing) and demand (project-level tax credits).\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The demand restrictions are intended to inhibit companies with ties to Chinese entities\u2014which is defined by assessing executive and board structure, debt and equity holders, IP holders, and principal place of business\u2014from monetizing the production tax credits issued to companies that make solar components in the US. It\u2019s not as simple as a company being a US LLC, S-Corp or other registered entity with a local President and Exec team. Thorough due diligence must be done for the US Treasury to make a determination as to whether or not a company passes or fails a FEOC test.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The other side of the equation is the supply side, which makes projects ineligible for monetizing the tax credits if the project itself is owned or invested in by a FEOC entity (beyond a certain threshold), or if the project exceeds a certain allowance of FEOC \u201cMaterial Assistance,\u201d which is effectively components and sub components sourced from FEOC entities at a project level. These thresholds vary for solar and storage projects. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Again, here, there are a lot of details that require examination. Beyond a superficial scan of a data sheet, we\u2019ll likely see manufacturers begin to produce \u201cReliance Letters\u201d indicating their audited material assistance ratios. These FEOC restrictions on the demand side don\u2019t take effect until 2026.\u00a0<\/span><\/p>\n<h2><b>How Do FEOC Regulations Impact Residential Solar?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">The homeowner tax credit claimed under section 25D is free and clear of any FEOC restrictions. <strong>Homeowners should be mindful, however, of who makes their technology and whether or not they\u2019ll be around to service it in the unlikely event of a warranty claim or issue in the future.<\/strong> Between FEOC restrictions and trade barriers, it\u2019s best to work with a US manufacturer with no ties to China or a long-standing importer that has no ties to China. This is why <\/span><span style=\"font-weight: 400;\">Solar.com<\/span><span style=\"font-weight: 400;\"> Energy Advisors typically recommend panels from Q Cells, REC, or Silfab.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For projects beginning next year, the third-party owner will be responsible for assessing the FEOC restrictions and running due diligence so homeowners are relieved of the burden of trying to navigate the FEOC maze.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With Trump\u2019s One Big Beautiful Bill signed into law, there\u2019s been a lot of discussion\u2014and confusion\u2014about what \u201cFEOC\u201d is, and how it will impact the US solar industry. What is&#8230;<\/p>\n","protected":false},"author":58,"featured_media":12229,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":""},"categories":[89,6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.5 (Yoast SEO v19.10) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What in the FEOC is Going On? Solar and &quot;Foreign Entity of Concern&quot; Rules in the OBBB | Solar.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.solar.com\/learn\/what-in-the-feoc-is-going-on-solar-and-foreign-entity-of-concern-rules-in-the-obbb\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What in the FEOC is Going On? 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