The domestic content requirements of the Inflation Reduction Act (IRA) provide a bonus tax credit for clean energy projects that incorporate a specified percentage of U.S.-manufactured materials. To qualify, a project must use 100% U.S.-produced steel and iron and meet escalating thresholds for the percentage of total manufactured product components sourced from the United States.
Domestic Content bonus can be applied to:
Investment Tax Credit (ITC) – IRC §48
Production Tax Credit (PTC) – IRC §45
+10 percentage points on the applicable tax credit rate (Investment Tax Credit or Production Tax Credit) if domestic content rules are satisfied and prevailing wage/apprenticeship requirements are met.
+2 points on ITC or PTC if domestic content is met, but prevailing wage/apprenticeship are not satisfied
With our in-house team, Walker Blue can help you maximize this bonus by collecting documentation, auditing on-site, and providing the necessary reporting needed to ensure you meet the domestic content bonus.
Domestic Content Requirements
Steel & Iron
- 100% of structural steel and iron must be U.S.-produced
Manufactured Products
- A certain adjusted percentage of total costs of manufactured product components must be U.S.-made.
- Thresholds vary by project type and construction start year:
- 2024: 40% (20% for offshore wind)
- 2025: 45%
- 2026: 50%
- 2027 onwards: 55%
Safe Harbor Election
The Domestic Content Safe Harbor is an optional compliance pathway established by the IRS that simplifies how developers prove their projects meet domestic content requirements under the Inflation Reduction Act (IRA). Instead of gathering detailed cost data from manufacturers, taxpayers can rely on IRS-provided tables that assign percentage values to common components in solar, wind, and battery storage projects. If the sum of U.S.-manufactured components meets or exceeds the required threshold, the project qualifies—making it easier to claim the full 10% domestic content bonus without complex cost certification.
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