Domestic Content Bonus Tax Credit Guidance

Domestic Content Bonus: Benefits and Requirements

The U.S. Inflation Reduction Act (IRA) of 2022 brought multiple changes to clean energy manufacturing and deployment tax credits that support domestic clean energy manufacturing and a push for “on-shoring” of supply chains. One key IRA incentive is the Domestic Content Bonus.

What is the Domestic Content Bonus?

• Provides a 2%/10% bonus to the Investment Tax Credit (ITC) and a 10% bonus to the Production Tax Credit (PTC) for projects meeting domestic content requirements.

Why It Matters:

• Incentivizes U.S. Manufacturing: Drives expansion of PV cell factories, thin film solar production, and battery supply chains.

• Supports On-Shoring: Encourages domestic sourcing of components, reducing reliance on foreign imports.

Key Supply Chain Impacts:

• Boosts investment in U.S. manufacturing for solar PV and battery components.

• Aligns with broader policy goals to shift critical mineral sourcing away from foreign entities of concern (FEOC).

Download the full Domestic Content Insights Report by completing the form to the right. This report covers:

• Domestic content bonus: Benefits and requirements

• Two approaches to achieving domestic content:

  • Direct Cost Method (N-23-38)

  • Safe Harbor Method (N-24-41 or N-25-08)

• Case studies

• Strategies to achieve compliance