In the past decade alone, the world of renewable energy has changed dramatically with legislation and regulations. As we approach the new year, yet another challenge has emerged in the world of solar panel installation for businesses in the United States. Businesses and business owners in the process of building their own commercial solar system must consider FEOC compliance when selecting a commercial solar energy company .
In This Article:
In the past decade alone, the world of renewable energy has changed dramatically with legislation and regulations. As we approach the new year, yet another challenge has emerged in the world of solar panel installation for businesses in the United States. Businesses and business owners in the process of building their own commercial solar system must consider FEOC compliance when selecting a commercial solar energy company .
What is FEOC in the Solar Industry?
FEOC is an acronym that stands for “Foreign Entities of Concern.” It identifies certain solar panel production companies or products controlled by specific foreign governments. China, Iran, North Korea, and Russia are the ruling’s main targets.
This new legislation aims to reduce U.S. reliance on adversarial nations for critical solar components. This includes hardware or subcomponents, or companies with strong ties to governing bodies of said adversarial nations.
This regulation has not been implemented as of writing this article, and will be taking effect in January 2026.
What Does FEOC Mean for Commercial Solar System Projects?
As a business owner looking into solar, one of the key benefits of signing onto a project before 2026 is the existing ITC (Investment Tax Credit).
At a 30% tax credit, solar is made much more affordable for the average business owner, and a much more sound investment altogether. While the ITC is going away in 2026, it is still possible for businesses to capitalize on it through a Safe Harbor provision.
However, the FEOC introduces another prerequisite for business owners to actually receive this tax credit. If a Safe Harbored project is found to be noncompliant with FEOC, the business owner won’t just miss out on part of the credit — they’ll likely miss out on the full 30% credit.
Safe Harboring Solar Projects
The Safe Harbor provision allows solar panel installations for businesses or individuals to effectively “lock in” the existing tax credit by meeting specific criteria for the project before a certain deadline, even if the project is fully completed at a later date.
Business owners and commercial solar sites can breathe a little easier as the ITC goes away for residential projects in 2026 with the Safe Harbor provision.
There are two ways that you could ensure that your project is Safe Harbored.
- A physical work test involves starting significant physical work on-site or off-site, and that it continues consistently until the project has been completed. Continuity is automatically satisfied if a project is placed in service within four calendar years from the original construction start date.
- The 5% Rule – once broad enough to ensure that a project could be safe harbored simply by incurring at least 5% of total project costs, the One Big Beautiful Bill Act has made this option much more difficult to pursue. This rule is only applicable if a solar project had already qualified for this rule prior to September 2nd, 2025, or if the project is less than or equal to than 1.5 MW (AC).
The physical work test route is the best way to ensure that your new commercial solar system qualifies for safe harboring.
How can you ensure full FEOC compliance?
Commercial solar customers worried about FEOC compliance should begin with considering two key questions.
Who owns the manufacturer of your solar panels and where does their supply chain originate? If your panels have overseas manufacturers based in any of the below countries or if the manufacturer’s supply chain originates in these countries, you may not be FEOC compliance and risk losing the Safe Harbor ITC altogether.
Countries Affected by FEOC Limitations:
- China
- Russia
- Iran
- North Korea
Looking for a FEOC Compliant installer for your commercial solar system?
The Green Plug works with Enphase products to use FEOC compliant materials for your project – and with our turnaround time, there’s no doubt you’ll be secure with a safe harbored ITC if you start before December 2025.
We’re ready when you are. Book a FREE call with our team today, and get your commercial solar project with the best white-glove solar company in the business.
