Month in a Minute: Top Headlines from the Indian Renewable Sector in July 2026

Solar Module Capacity Under ALMM Grows to 215.5 GW

PFC Awards Project to Evacuate 3 GW of Renewables in Andhra Pradesh

Storage, Engineering, and Service Become Distributed Solar’s Growth Drivers

Daily News Wrap-Up: MNRE Proposes Uniform Solar Cell Nomenclature

MENA Weekly Round-Up: Egypt Signs PPA with Alcazar for 407 MW Wind Project

Solar Tender and Auction Activity Declines in Q2 2026

MNRE Proposes Standardized Nomenclature for Solar Cells Under ALMM List II

India Can Build a Complete Solar Manufacturing Ecosystem Within Five Years: Interview

Green Hydrogen and Storage Key to Curbing Renewables Curtailment: Interview

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					</table>With the U.S. beginning to <a href="https://www.mercomindia.com/could-u-s-feoc-rules-create-new-export-opportunities-for-indian-solar-manufacturers" target="_blank" rel="noopener">enforce</a> the Foreign Entity of Concern (FEOC) rules and global buyers accelerating China+1 sourcing strategies, Indian solar module manufacturers are positioning themselves to capture new export opportunities and expand their international manufacturing footprint. Manufacturers with transparent supply chains, robust quality systems, and FEOC-compliant sourcing strategies are expected to be the biggest beneficiaries.
The Ministry of New and Renewable Energy (MNRE) <a href="https://www.mercomindia.com/mnre-issues-model-agreement-for-electrolyzer-as-a-service" target="_blank" rel="noopener">issued</a> a model service agreement for electrolyzer-as-a-service to support the adoption of green hydrogen across industrial sectors. Under the proposed arrangement, a service provider will finance, design, install, own, operate, and maintain an electrolytic hydrogen generation plant at the consumer’s premises.
In an interview on the sidelines of the Mercom India Renewables Summit 2026, Vishal Jain, Managing Director at August Energy India, <a href="https://www.mercomindia.com/battery-storage-to-become-a-key-enabler-for-distributed-solar" target="_blank" rel="noopener">discussed</a> the growth of decentralized energy, the increasing role of battery storage, the emergence of integrated utility solutions, and the outlook for India’s solar manufacturing ecosystem.
The Solar Energy Corporation of India <a href="https://www.mercomindia.com/seci-announces-winners-of-4-4-mw-rooftop-solar-project-auction" target="_blank" rel="noopener">announced</a> the winners of its auction to set up 4.455 MW of grid-connected rooftop solar projects (Tranche IX) across India under the renewable energy service company model.
REC Power Development and Consultancy <a href="https://mercomindia.com/recpdcl-announces-winner-of-4-5-gw-transmission-project" target="_blank" rel="noopener">announced</a> the winner of its auction to set up an interstate transmission system to evacuate power from 4.5 GW of green hydrogen/ammonia projects in Visakhapatnam, Andhra Pradesh.
PFC Consulting invited bids to <a href="https://mercomindia.com/pfc-consulting-tenders-two-765-kv-intrastate-transmission-projects-in-rajasthan" target="_blank" rel="noopener">develop</a> an intrastate transmission system for 765 kV grid substations in Bikaner and Babai in Rajasthan. The last date to submit bids is September 25, 2026. Bids will be opened on the same day.
China <a href="https://www.mercomindia.com/chinas-solar-capacity-tops-1-27-tw-but-capacity-additions-drop-66-in-1h-2026" target="_blank" rel="noopener">added</a> 158.7 GW of new power generation capacity in the first half of 2026, according to the latest electricity statistics released by the National Energy Administration.
Electric vehicle maker Tesla <a href="https://www.mercomindia.com/tesla-q2-2026-revenue-rises-26-on-record-deliveries-misses-earning-estimates-2" target="_blank" rel="noopener">reported</a> total revenue of $28.24 billion in the second quarter of 2026, a 26% year-over-year increase from $22.5 billion, driven by vehicle deliveries, higher automotive sales, and continued growth in its services business.
Sino-American Silicon Products, a Taiwan-based manufacturer of semiconductor and renewable energy materials, and United Renewable Energy, a Taiwanese solar cell and module manufacturer, have <a href="https://www.mercomindia.com/sas-ureco-form-us-joint-venture-to-build-1-gw-solar-module-plant" target="_blank" rel="noopener">established</a> a U.S.-based joint venture to set up a 1 GW solar module manufacturing facility.

Daily News Wrap-Up: US FEOC Rules May Benefit Indian Solar Exporters

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					</table>Sino-American Silicon Products (<a href="https://www.saswafer.com/en/" target="_blank" rel="noopener">SAS</a>), a Taiwan-based manufacturer of semiconductor and renewable energy materials, and United Renewable Energy (<a href="https://www.urecorp.com/en/" target="_blank" rel="noopener">URECO</a>), a Taiwanese solar cell and module manufacturer, have established a U.S.-based joint venture to set up a 1 GW solar module manufacturing facility.
The companies said the project will involve a total planned investment of approximately $40 million. SAS will hold a 51% equity stake in the venture, while URECO will own the remaining 49%.
The new company will be led by solar industry executive Fred Yeh.
The companies said the facility will supply solar modules with product traceability and supply chain transparency for customers in the U.S. market.
The two companies are joining forces to expand their presence in the U.S. market, further strengthening their service capabilities and supply flexibility for customers across North America.
SAS and URECO said the investment comes as the U.S. continues efforts to expand domestic manufacturing and strengthen energy independence. They also cited growing electricity demand from artificial intelligence data centers and increasing customer requirements for locally manufactured products, supply chain transparency, product quality, and bankability as factors supporting the investment.
SAS said it will serve as both a strategic investor and operational partner for the joint venture, drawing on its experience in solar technology, manufacturing, and international business development. URECO said it will contribute its experience in module manufacturing, engineering, and sales, supported by its presence in the U.S. market.
In February 2026, the U.S. Department of the Treasury <a href="https://www.mercomindia.com/us-tightens-tax-credit-rules-to-curb-chinas-clean-energy-role" target="_blank" rel="noopener">issued</a> interim guidance to enforce provisions under Section 45X of the Internal Revenue Code that restrict companies from claiming federal clean energy subsidies if they rely on foreign-made material.
In the same month, the U.S. Department of Commerce <a href="https://mercomindia.com/us-to-retain-antidumping-duties-on-polysilicon-imports-from-china-taiwan" target="_blank" rel="noopener">concluded</a> that revoking the prevailing antidumping and countervailing duties on crystalline silicon photovoltaic product imports from China and Taiwan would lead to a recurrence of dumping.
With the U.S. beginning to <a href="https://www.mercomindia.com/could-u-s-feoc-rules-create-new-export-opportunities-for-indian-solar-manufacturers" target="_blank" rel="noopener">enforce</a> the Foreign Entity of Concern rules and global buyers accelerating China+1 sourcing strategies, Indian solar module manufacturers believe the policy shift in the U.S. has unlocked new export opportunities and expanded their international manufacturing footprint.

SAS, URECO Form US Joint Venture to Build 1 GW Solar Module Plant

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					</table>With the U.S. beginning to enforce the Foreign Entity of Concern (FEOC) rules and global buyers accelerating China+1 sourcing strategies, Indian solar module manufacturers are positioning themselves to capture new export opportunities and expand their international manufacturing footprint.
Manufacturers with transparent supply chains, robust quality systems, and FEOC-compliant sourcing strategies are expected to be the biggest beneficiaries.
Starting April 2026, U.S. companies <a href="https://www.mercomindia.com/us-tightens-tax-credit-rules-to-curb-chinas-clean-energy-role" target="_blank" rel="noopener">seeking</a> federal incentives such as production and investment tax credits for solar and battery storage projects must demonstrate that their supply chains do not receive material assistance from prohibited foreign entities. These include entities linked to China, Russia, Iran, and North Korea.
U.S. companies must also establish that such foreign entities do not exercise effective control over projects claiming the incentives.
The new rules come at a time when India’s module manufacturing is expanding faster than domestic demand, creating a strong incentive for manufacturers to diversify into export markets. If not immediately, Indian companies can also consider exporting solar cells to the U.S., although current manufacturing capacity hovers around 30 GW, which is inadequate to meet domestic demand. But several companies are setting up new production lines and have announced capacity expansions, and supply could outstrip demand in the second half of next year.
According to industry executives, the COVID-19 pandemic fundamentally changed how global buyers view supply chain risk.
Abhishek Kaushal, Chief Business Officer at <a href="https://insolationenergy.in/" target="_blank" rel="noopener">Insolation Energy</a>, said the pandemic exposed the risks of excessive dependence on a single country for global supply chains. Since then, several countries, including the U.S., have been working towards China+1 strategies.
Kaushal said the antidumping and countervailing duty investigations involving Indian solar products might have created short-term trade friction with the U.S. However, FEOC restrictions could ultimately encourage U.S. developers to diversify procurement away from China-linked supply chains while preserving access to federal tax credits.
Manufacturers believe the expanding FEOC compliance framework is reshaping global procurement strategies and creating a significant, but highly selective export opportunity for Indian suppliers.
Kalpesh Kalthia, Chairman and Managing Director at <a href="https://kosolenergie.com/" target="_blank" rel="noopener">Kosol Energie</a>, said the rules could create a sharp divide among manufacturers. Companies that continue to rely heavily on upstream components sourced from regions that are not compliant with FEOC regulations may face trade barriers and tariff exposure.
He added that manufacturers capable of providing complete and auditable supply chain traceability down to the raw-material level are likely to fare the best.
As a result, competitive advantage is likely to shift from manufacturing capacity alone to supply chain transparency and regulatory compliance.
Tanmoy Duari, Chief Executive Officer at <a href="https://axitecsolar.com/en" target="_blank" rel="noopener">AXITEC Energy India </a>believes that companies seeking to supply the U.S. market in the near term must establish transparent sourcing systems, strengthen supply chain traceability, and work with suppliers to comply with applicable regulations.
During its fourth-quarter earnings call, <a href="https://www.waaree.com/" target="_blank" rel="noopener">Waaree Energies</a> noted that the FEOC rules can help non-Chinese supply chains gain traction in the U.S. The Maharashtra-based company said the regulations could encourage non-Chinese manufacturers to build capacity and establish robust supply chains serving the U.S. market. This could include manufacturing in India for direct exports or supplying components for further processing in the U.S.
Waaree noted that Europe, too, has expressed its intention to reduce its dependence on Chinese sourcing, which could place non-Chinese supply chains on a sustained growth trajectory.
Integrated Manufacturers Biggest Winners
The FEOC framework is also expected to reshape competitive dynamics within India&#8217;s manufacturing industry.
Duari said manufacturers with integrated cell and module production are likely to have an advantage because vertical integration provides greater control over supply chains, traceability, product quality, and regulatory compliance.
Pure-play module manufacturers could remain competitive if they have access to FEOC-compliant solar cell suppliers, he added.
However, not all manufacturers are sold on the sustainability of the vertical integration route. Kalthia believes that vertical integration could also become a compliance liability under strict FEOC rules.
He added that an integrated manufacturer could be excluded from the U.S. market if an upstream wafer or polysilicon supplier were flagged for non-compliance.
Kalthia said that manufacturers must be able to segregate non-FEOC cells and wafers for U.S.-bound projects while using alternative sourcing channels for domestic or less-restrictive export markets.
Production in the U.S.
The FEOC rules could also accelerate Indian investment in U.S.-based manufacturing and strategic partnerships.
Kaushal said the U.S. is seeking to reduce its dependence on direct imports while continuing to attract foreign manufacturing investment. Several international manufacturers are therefore moving their production chains closer to the U.S. market.
Manufacturers said the trend is also supported by policy incentives and broader efforts to strengthen local supply chains.
However, Duari noted that imports would likely continue to play an important role in meeting market requirements, particularly in the medium term, keeping global manufacturing hubs such as India relevant to the U.S. supply chain.
Manufacturers agreed that the U.S. module assembly capacity might be expanding, but the market cannot achieve complete import independence in the near term.
Industry insiders also feel that compliance with international guidelines like FEOC comes with their own challenges.
Kalthia said the U.S. has built substantial downstream module assembly capacity but continues to face bottlenecks in domestic cell and wafer production. Compliance would require a strategic combination of domestic and imported components.
Recognizing that future U.S. procurement strategies are likely to combine domestic and overseas manufacturing, Kosol Energie is also evaluating opportunities to establish a manufacturing presence in the U.S. The Gujarat-based company is also looking to enter into strategic partnerships with existing domestic manufacturers.
Indian manufacturers are already responding by investing further upstream. Waaree Energies, for example, has announced an investment of ₹39 billion (~$405.28 million) for a 2,500-ton-per-day photovoltaic glass manufacturing facility. The proposed capacity could support the production of approximately 16-17 GW of solar modules annually.
The company said that glass accounts for approximately 23% of module cost and 75% of module weight, which will significantly strengthen its cost competitiveness and supply chain independence. It has commenced construction of its 10-gigawatt ingot-wafer facility in Nagpur, with a CAPEX of ₹62 billion (~$642.48 million).
Export Volumes Difficult to Forecast
Despite the opportunity, manufacturers remain cautious about forecasting export volumes because U.S. trade and industrial policy continues to evolve rapidly.
According to data from the Department of Commerce, India <a href="https://www.mercomindia.com/indias-solar-imports-rise-14-qoq-in-q1-2026-exports-continue-to-decline" target="_blank" rel="noopener">exported</a> solar cells and modules worth over $77.7 million (~₹7.1 billion) in Q1 2026, a 70.9% YoY decline from $267.6 million (~₹23.2 billion).
The sharp decline also illustrates how policy uncertainty can influence export demand despite strong underlying market potential.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-101978 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1.png" alt="" width="982" height="627" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1.png 982w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1-300x192.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1-768x490.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1-650x415.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1-624x398.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/07/feoc1-600x383.png 600w" sizes="auto, (max-width: 982px) 100vw, 982px" /></a>
The U.S. accounted for 90.5% of India’s solar exports during the quarter, highlighting continued concentration risk in export demand. The UAE, China, and Thailand accounted for 4.6%, 2.4%, and 0.6% of exports.
Kosol Energie said it has secured contracts and has the capacity to support substantial export volumes. However, it is concerned about the potential impact of the broad tariffs under ongoing Section 232 investigations, which could result in additional duties or quotas on imported polysilicon and downstream solar components.
Despite these uncertainties, manufacturers expect compliant modules supplied to the U.S. market to command a premium over modules sold domestically.
Kaushal said U.S. exports have historically generated profit margins 40% to 60% higher than domestic sales, although the gap has narrowed over time.
Manufacturers noted that the attractiveness of the U.S. market extends well beyond pricing premiums. Long-term policy certainty, access to global customers, foreign-exchange diversification, and stronger acceptance by international financial institutions are also important considerations.
Meanwhile, compliance costs, certification standards, logistics, supply chain traceability, and market-specific regulatory obligations are among the factors that shape U.S. export pricing, according to Duari.
Strengthening Sourcing Strategies
Indian manufacturers now face the dual challenge of meeting rising domestic demand under the Approved List of Models and Manufacturers List-II mandate while positioning themselves for higher-value export opportunities under the evolving FEOC framework.
Kaushal said manufacturers could pursue four broad sourcing strategies for high-value U.S. orders: reserving captive cell production for exports, sourcing non-FEOC cells from compliant countries, accelerating backward integration, and deploying blockchain-based or molecular traceability systems.
Industry executives said manufacturers are already working to expand domestic cell production through private investment and government-supported manufacturing programs. Many believe these investments will not only support exports but also strengthen India&#8217;s long-term manufacturing competitiveness.
Unlike previous trade measures, FEOC is not simply a tariff or import restriction. Instead, it shifts competition toward supply chain transparency and traceability. Manufacturers that can demonstrate compliance across the entire value chain, from polysilicon and wafers to cells and modules, are likely to gain a competitive advantage, while those relying on opaque or non-compliant sourcing may find access to the U.S. market increasingly difficult.

Could US FEOC Rules Create New Export Opportunities for Indian Solar Manufacturers?

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					</table>The solar and energy storage markets in the U.S. have entered a phase of uncertainty in the first quarter (Q1) of 2026, as several policy developments began directly influencing pricing, procurement strategies, and supply chains, according to <a href="https://www.anzarenewables.com/" target="_blank" rel="noopener">Anza’s</a> Q1 2026 Quarterly Pricing, Foreign Entity of Concern (FEOC) Compliance, and Domestic Content Report.
Solar Module Prices Remain Flat
Solar module prices remained largely flat at around $0.285/W. Imported modules held steady at $0.265/W, reflecting continued global overcapacity, but domestically linked products saw sharp price increases.
Mono PERC modules recorded a 20% surge to $0.33/W, overtaking TOPCon pricing for the first time. This shift is attributed to strong demand for domestically manufactured modules ahead of the July 3, 2026, Investment Tax Credit (ITC) Safe Harbor deadline.
In contrast, TOPCon prices remained stable at $0.28/W, while HJT modules hovered near $0.385/W.
<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-92995 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2.png" alt="Anza report 2" width="809" height="454" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2.png 809w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-300x168.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-768x431.png 768w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-650x365.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-624x350.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-2-600x337.png 600w" sizes="auto, (max-width: 809px) 100vw, 809px" /></a>
In November, the market looked normal, with Mono PERC at $0.275/W, TOPCon at $0.285/W, and HJT at $0.39/W. By February, it changed dramatically, with PERC at $0.33/W (+20%), TOPCon at $0.28/W (-2%), and HJT at $0.385/W (-2%).
Domestic Manufacturing 
The report highlights a widening pricing gap between domestic and international supply chains. U.S.-made solar cells reached $0.49/W, while modules assembled domestically using imported cells rose to $0.325/W. Fully imported modules, however, remained flat.
This divergence reflects growing demand for domestic content to qualify for incentives, even as supply remains constrained.
Anza expects further expansion in domestic manufacturing, with three additional U.S. cell suppliers likely to come online by end-2026, taking the total to 15.
Policy Actions Increase Market Uncertainty
The quarter was marked by multiple policy developments, including a Section 337 investigation into TOPCon imports.
On March 26, 2026, the U.S. International Trade Commission <a href="https://www.mercomindia.com/usitc-opens-probe-into-topcon-solar-imports-for-patent-infringement" target="_blank" rel="noopener">voted</a> to institute an investigation into imports of TOPCon cells and modules. Petitioner First Solar has alleged patent infringement by multiple manufacturers and seeks a general exclusion order and cease-and-desist orders.
Another decision that <a href="https://www.mercomindia.com/us-hits-indian-solar-cells-with-126-preliminary-countervailing-duties" target="_blank" rel="noopener">affected</a> the market was the imposition of high anti-dumping and countervailing duties on imports from India, Indonesia, and Laos, with preliminary rates ranging from 80% to 143%.
Also, increased enforcement under the Uyghur Forced Labor Prevention Act and evolving Section 301 actions could further disrupt supply chains and increase costs.
FEOC Clarity Expands Supply
A key regulatory development in Q1 2026 was the updated Internal Revenue Service (IRS) guidance on FEOC compliance.
In Q1, the updated IRS guidance clarified core FEOC requirements. It confirmed that taxpayers can rely on existing Safe Harbor tables and supplier certifications, and that compliance at the solar cell level alone is sufficient to qualify as FEOC-compliant. While these changes broaden eligible options, tax equity investors are likely to continue applying more stringent verification standards in practice.
Currently, 78 out of 230 solar modules tracked by Anza met FEOC requirements.
Energy Storage 
The downward trend in the battery energy storage system pricing observed in the latter half of 2025 carried into Q1 2026.
Prices for utility-scale systems continued to decline significantly, while distributed generation (DG)-scale systems have largely stabilized, indicating a floor price in that segment.<a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-92996 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4.png" alt="Anza report 4" width="573" height="370" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4.png 573w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2026/04/Anza-report-4-300x194.png 300w" sizes="auto, (max-width: 573px) 100vw, 573px" /></a>
In the energy storage segment, utility-scale battery systems continued to decline, with AC wrap prices falling to around $177-178/kWh and self-integrated systems to $145/kWh, marking declines of up to 20% from 2025 peaks.
However, DG-scale systems stabilized, with prices near $203/kWh, suggesting a potential floor price as suppliers prioritize larger projects.
Storage Faces Policy Risks 
Despite recent cost reductions, the storage sector faces mounting policy risks. Tariffs on active anode materials could add $8-$15/kWh, while China’s reduction in VAT export rebates is expected to increase costs by 3% in 2026 and by a further 3% in 2027.
Potential restrictions on Chinese inverters and new Section 232 investigations into batteries and grid equipment could further tighten supply and increase prices.
FEOC compliance in storage remains more challenging than in solar, with only 40% of products classified as low risk and over half as high risk.
At the same time, domestic manufacturing is scaling rapidly, with the number of U.S.-based battery cell suppliers expected to more than double from 6 in 2026 to 13 by 2027, improving long-term supply prospects.
Outlook for 2026
Key developments to watch in 2026 include the Section 232 polysilicon decision and the outcome of the TOPCon investigation, both of which could reshape pricing dynamics.
With the Safe Harbor deadline approaching, buyers are accelerating procurement decisions, particularly for domestic sourcing, while facing an uncertain future amid a changing tariff regime, compliance requirements, and supply chain risks.
The U.S. solar industry <a href="https://www.mercomindia.com/us-solar-industry-sees-14-yoy-decline-in-2025-with-43-2-gw-installed" target="_blank" rel="noopener">added</a> 43.2 GW of new capacity in 2025, a 14% decline from 2024, according to the U.S. Solar Market Insight 2025 Year in Review report released by Wood Mackenzie and the Solar Energy Industries Association. Even with the annual decline, solar remained the dominant source of new electricity generation, accounting for 54% of all new electricity-generating capacity added to the U.S. grid during the year.

US Energy Storage Costs Fall While Solar Market Suffers Under Policy Pressure

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					</table>A new <a href="https://www.cruxclimate.com/" target="_blank" rel="noopener">Crux</a> survey suggests the U.S. clean energy market is moving quickly on Foreign Entity of Concern (FEOC) compliance, but many firms still don’t feel ready for what is in store for 2026.
In an October 2025 survey of 50 developers, manufacturers, and other market participants, more than 90% said they have already begun some combination of ownership reviews, contract audits, and supply-chain mapping, yet only 38% described themselves as fully prepared for 2026.
The compliance push is being driven by the FEOC framework <a href="https://www.mercomindia.com/us-to-tighten-federal-review-of-solar-and-wind-energy-projects" target="_blank" rel="noopener">enacted</a> under the One Big Beautiful Bill, which ties eligibility for major clean energy incentives, including the clean electricity production tax credit (PTC) and investment tax credit (ITC) under Sections 45Y and 48E.
The Section 45X advanced manufacturing production tax credit is dependent on whether a taxpayer is a prohibited foreign entity (PFE), a PFE has effective control through contracts, or if the project’s supply chain exceeds material-assistance cost-ratio (MACR) limits.
Entity-level restrictions generally apply beginning with tax years after July 4, 2025, while MACR tests begin to bite for 45Y/48E projects that start construction after 2025 and for 45X components sold beginning in 2026.
Survey results indicate ownership exposure is not where most firms expect the biggest problems to emerge. Four in five respondents said they have no specified foreign entity (SFE) or foreign-influenced entity (FIE) ownership, and the remaining responses were concentrated below 25%, with a smaller slice reporting ownership below 40%.
Governance rights tied to foreign ownership also appeared uncommon, with fewer than 10% saying SFE/FIE owners can appoint officers or directors. Where ownership issues do exist, some firms reported mitigation steps such as resolving governance rights or liquidating SFE/FIE stakes.
Contracting, however, remains a key uncertainty, especially around the still-developing concept of effective control. Crux found that 54% of respondents reported no contracts at risk after their reviews, while 36% said reviews are still underway, 10% indicated they do have contracts that include effective-control payments to prohibited foreign entities (PFE).
Among those identified problematic payment provisions, roughly 80% said they plan to revise contract terms to remove effective-control elements, and some also flagged that certain agreements were signed before July 4, 2025, an issue expected to be addressed further in Treasury guidance.
A longer tail risk also looms for Section 48E. Beginning in 2028, an effective-control payment made within 10 years of a facility is placed in service can trigger full ITC recapture.
Supply-chain traceability is where the survey shows the largest execution gap. While substantially all respondents reported that they have begun mapping, 70% said their supply chains are only partially mapped, and 30% reported their supply chains are fully mapped, an early indicator that many companies may still be building the data needed for MACR calculations and audit defense.
Verification practices are also fragmented, with 48% relying primarily on internal verification, 42% expecting routine third-party audits, and 10% relying solely on supplier certifications.
To document MACR compliance, most firms are adopting a layered approach. Nearly 70% reported using both IRS cost safe-harbor tables and supplier certifications, compared with 10% using only safe-harbor tables and 20% relying only on supplier certifications.
That posture is increasingly being pushed downstream through procurement, as more than 80% of project developers said they require suppliers/manufacturers to represent that their products are not produced by PFEs and/or that suppliers do not know upstream parties are PFEs, with 62% requiring both representations.
The survey points to solar modules, battery packs, and inverters as the most exposed segment categories with parts directly or indirectly sourced from PFEs. In contrast, wind components were viewed as comparatively lower risk and more diversified across the U.S., Europe, and Japan.
Even with high engagement, many firms are leaning heavily on outside support to interpret evolving rules and build defensible processes. Nearly three-quarters of respondents reported engaging external legal or consulting advisors, and respondents also expressed a desire for standardization in documentation and supply-chain accounting practices.
Until Treasury and DOE provide clearer guidance, particularly on effective control, anti-circumvention, and MACR safe harbors, developers and manufacturers expect to revisit diligence already underway as the compliance framework tightens around 2026 deal flow.
Representatives from 143 solar companies have <a href="https://www.mercomindia.com/us-solar-companies-demand-end-to-permitting-moratorium/" target="_blank" rel="noopener">written</a> to the U.S. Senate and House of Representatives, urging them to work with the Department of the Interior to address the July memorandum that resulted in a near-complete moratorium on solar project permitting.

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