Solar Power World
By Aaron Gomolak, CEO, Ampt | June 15, 2026
Since its passage, the One Big Beautiful Bill Act (OBBBA) has introduced new constraints for companies seeking clean energy tax credits, requiring projects to meet both domestic content thresholds and foreign entity of concern (FEOC) sourcing restrictions. Together, these provisions have compressed eligibility timelines, created new cost considerations related to higher-priced non-FEOC equipment and generated procurement, supply chain and system design issues.
Credit: iStock
FEOC restrictions are primarily directed at modules and components sourced from Chinese manufacturers, which have historically supplied the majority of utility-scale PV equipment in the U.S. market.
With the July 4 beginning-of-construction and safe harbor deadline approaching, developers and EPCs are racing to find approaches that remain compliant with the new law while still capturing as much of the FEOC cost advantage as possible and meeting project timelines. One strategy gaining traction is blended module procurement, combining FEOC and non-FEOC modules within the same project.
Done correctly, this approach improves supply flexibility, reduces cost pressure and preserves a pathway to achieving FEOC-compliance, domestic content and full investment tax credit (ITC) eligibility. Done incorrectly, it can eliminate tens of millions of dollars in credit value.
The OBBBA introduced two distinct compliance considerations for projects looking to secure §48E ITC and §45Y PTC. Both are important and must be properly addressed to receive full credit value, but they carry different consequences when missed.
The FEOC material assistance restriction disqualifies a project from claiming tax credits entirely if prohibited foreign entity (PFE)-sourced manufactured product costs exceed a statutory threshold. The compliance calculation, known as the material assistance cost ratio (MACR), requires that non-PFE sourced costs represent at least 40% of total manufactured product costs in 2026, rising annually to 45% in 2027, and 50% in 2028. For energy storage, the threshold jumps from 55% in 2026 to 60% in 2027, and then 65% in 2028.
The domestic content bonus adds 10 percentage points to the base credit rate for projects sourcing enough manufactured products from U.S. suppliers. The current 2026 threshold is 50% U.S.-origin cost, which is set to rise to 55% in 2027. Failing to meet this threshold forfeits the adder but not the base credit.
Most developers have remained focused on project-level FEOC and domestic content calculations. However, the regulatory text points to something stricter.
The final IRS regulations under §45Y and §48E define a unit of qualified facility as all solar panels connected to a common inverter. The MACR statute cross-references the same definition. This means that in a utility-scale project with dozens or hundreds of central inverters, each inverter block is its own compliance unit, not the project as a whole.
The OBBBA’s material assistance provisions apply to each “qualified facility” as defined under §48E, which adopts this same unit definition. IRS Notice 2026-15, which is the primary FEOC compliance guidance issued under the OBBBA, confirms that a separate MACR calculation is required for each qualified facility, meaning per-inverter-block compliance is the operative standard. Per-inverter-block compliance should also mean project-level compliance, so designing for the former is key. Designing for project-level compliance and being inaccurate exposes every non-compliant inverter block to credit disqualification. This creates an asymmetry that strongly favors treating the inverter block as the compliance unit immediately.
Practically, this creates a problem for blended procurement strategies. Without a solution that enables FEOC and non-FEOC modules to be mixed on the same inverter block, the only two viable architectures are:
Mixing FEOC and non-FEOC modules from different manufacturers on the same inverter is not straightforward in a conventional central inverter system. Two technical problems arise:
First, string mismatch occurs because modules from different manufacturers have different electrical characteristics, including current output, temperature coefficients and degradation profiles. In a central inverter system, mismatched strings in parallel force the inverter’s single MPPT to find a compromise operating point, reducing energy yield across all strings.
Second, reverse current damage can occur when a higher-current string drives current backward through a lower-current string in a parallel-connected configuration, potentially damaging bypass diodes and cells. This risk grows as the two module populations age at different rates over the asset life. It may also put module warranties at risk.
Addressing these issues is necessary to preserve system performance, reliability and long-term project economics while navigating FEOC and domestic content requirements.
Ampt string optimizers are DC/DC converters deployed between the module strings and the combiner box. Each optimizer performs independent maximum power point tracking (MPPT) on its input strings, conditioning each string’s output before it combines with others on the DC bus. This eliminates the direct parallel electrical connection between dissimilar strings, removing mismatch losses and reverse current risk.
The result is that FEOC and non-FEOC modules can be placed on the same central inverter block without electrical performance penalty, regardless of differences in manufacturer specifications or long-term degradation profiles. Every inverter block can be designed to satisfy both the per-inverter MACR threshold and the domestic content bonus threshold simultaneously.
Optimizers can be deployed across all strings to enable blending of FEOC and non-FEOC modules on each inverter block, achieving per-inverter FEOC compliance and full eligibility for ITC and the domestic content bonus. Full deployment also captures additional system-level benefits, including reduced electrical balance-of-system cost, inverter and transformer capex savings, improved lifetime energy yield and O&M savings from granular string-level monitoring data that also supports compliance documentation efforts. A partial deployment, for example only on the strings carrying non-FEOC modules, can also achieve the blending capability needed for per-inverter compliance.
Ampt has modeled the economic impact of these design decisions across four scenarios for a representative 130-MW_DC utility-scale project. The scenarios progress from a 0% FEOC baseline through full optimizer deployment with 70% FEOC module procurement.
Based on a 130-MW_DC/100-MW_AC project, 2026 construction start, $1.10/W installed cost, 30% base ITC, 93.5¢ transfer price, $0.08/W FEOC module price advantage. Scenario B result reflects ITC on non-FEOC blocks only with domestic content bonus lost due to per-inverter test failure on FEOC-dedicated blocks.
The four scenarios together frame a range of economic outcomes. Scenario A — all non-FEOC modules, no optimizer — achieves full ITC and domestic content bonus eligibility but forfeits the procurement cost advantage that FEOC modules offer. At scale, that forgone savings represents millions of dollars in higher module costs relative to a blended procurement strategy. Scenario B captures the FEOC module cost advantage by having FEOC and non-FEOC modules on separate inverter blocks but ends up with only ITC qualification on the non-FEOC inverter blocks and loses the domestic content bonus altogether, producing the worst outcome of the four. Scenarios C and D use string optimizers to blend modules on each inverter block enabling full ITC and domestic content bonus eligibility while also capturing FEOC module procurement savings. In the case of the full deployment of optimizers in scenario D, there are additional system-level cost savings and energy production benefits. Both optimizer scenarios generate materially higher total value than the others.
A full technical paper detailing the compliance framework, the engineering basis for the blending solution and the complete four-scenario value analysis is available by contacting Ampt or downloading online. Developers with specific project configurations are welcome to reach out to Ampt for a project-specific compliance and value analysis.
As the July 2026 safe harbor and construction deadline approaches, utility-scale developers can no longer treat FEOC compliance, domestic content strategy and system design as separate workstreams. The regulatory framework links all three, and the financial consequences of misalignment can be worth tens of millions of dollars. Yet, proactive design strategies that enable cost-effective blending of FEOC and non-FEOC modules, without compromising performance, reliability or compliance, are the practical path to preserving full tax credit eligibility and maximizing project value.
Aaron Gomolak is CEO of Ampt, a manufacturer of DC power management products for utility-scale solar and energy storage systems. Ampt has direct experience with deploying blended module PV system designs at scale.
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