Treasury and IRS update the elective safe harbor for domestic content bonus credit (Notice 2025-08)
On January 16, 2025, Treasury and the IRS released Notice 2025-08 (the “Notice”) which provides the first update to the elective safe harbor for the domestic content bonus credit (“First Updated Elective Safe Harbor”) and modifies the safe harbor provided in Notice 2024-41.
The Notice provides key updates including the following:
Expands the solar photovoltaic (PV) table in two distinct tables, providing updated assigned cost percentages for both ground-mount and rooftop solar facility and including new columns with optional assigned cost percentages for PV modules with domestic crystalline silicon cells and domestic wafers.
Updates the assigned cost percentages in the battery energy storage system (BESS) table, which apply to both grid-scale BESS and distributed BESS.
Clarifies the use of Notice 2024-41 and the Notice for a retrofitted facility meeting the 80/20 rule.
Renames, reclassifies, and defines certain Applicable Project components (APCs) and manufactured product components (MPCs).
Deloitte Tax LLP provides an analysis of the Notice in a new tax alert.
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