Beat the FEOC Restrictions: Why 2025 Is the Year to Act on Solar
Updated
November 26, 2025
3:12
min read
About Author
Alex has spent his entire career, in solar energy. In his current role at SunGreen, Alex oversees the design and optimization of systems to ensure they fit customer needs and maximize return on investment. Alex loves the technical aspects of solar energy production and is also well-versed in Federal, state, and utility-level policies regarding renewable energy. Alex is also a regular panel member in various industry webinars.
Find out how Sungreen can help your company avoid high demand charges.
What Are FEOC Restrictions and Why They Matter for Businesses
The federal government is phasing in new “Foreign Entity of Concern” (FEOC) rules under emerging clean-energy guidance. These rules limit how much equipment sourced from certain countries can be used in solar projects that claim federal tax credits.
Beginning in 2026, solar systems may need to meet more stringent domestic-content requirements to qualify for the full 30% ITC.
This could mean:
· Some commonly used components may no longer qualify
· Equipment costs may increase as demand rises for compliant products
· Longer procurement timelines due to tighter supply chains
For many businesses, these changes introduce uncertainty — and a strong incentive to act sooner.
How the FEOC Deadline Impacts the 30% Investment Tax Credit
Solar projects that begin construction before the end of 2025 can avoid many of the FEOC-related limitations scheduled for 2026.
The IRS recognizes two ways to “begin construction”:
1. Physical Work Test
2. 5% Safe Harbor Test (the most flexible option for commercial projects)
Under Safe Harbor, a business can lock in today’s ITC rules by procuring at least 5% of the project’s total cost before December 31, 2025.
This allows companies to:
· Secure the 30% ITC under 2025 rules
· Avoid stricter FEOC compliance hurdles
· Delay construction to their preferred timeline
· Reduce exposure to rising equipment and labor prices
Acting in 2025 helps you qualify under today’s clearer, more flexible rules.
Steps to Qualify: Secure Your Solar Incentives Before 2026
1. Contract with a Qualified EPC (SunGreen Systems)
A signed agreement with an Engineering, Procurement & Construction (EPC) partner is the first step in establishing project intent and timing.
2. Complete a 5% Safe Harbor Procurement
This typically includes early purchases of eligible components such as:
· Solar panels
· Solar racking systems
· Inverters and transformers
SunGreen Systems works closely with trusted U.S. suppliers to structure and document Safe Harbor purchases properly.
3. Maintain Required IRS Documentation
Accurate documentation is essential. This includes:
· Invoices
· Purchase orders
· Delivery or production confirmations
· Records linking equipment to your specific project
SunGreen manages Safe Harbor documentation from end to end to ensure compliance.
Safe Harbor Your Project to Preserve Full ITC Value
Safe Harbor is one of the most effective tools available to commercial solar buyers in 2025. It allows businesses to:
· Lock in today’s incentives
· Delay construction until they’re ready
· Avoid future price increases
· Protect project ROI in a tightening regulatory environment
Even if construction doesn’t start until well into 2026, Safe Harbor allows you to use 2025 rules — not 2026 rules — to determine your tax credit.
Partnering with a Proven EPC Like SunGreen Systems
FEOC rules, domestic-content requirements, and tax-credit qualifications can be complex. Working with an experienced commercial EPC team ensures your project is designed, procured, and documented correctly from the beginning.
SunGreen Systems brings:
· 15+ years of California commercial EPC experience
· U.S.-compliant BOS supply chains
· Turnkey Safe Harbor planning and documentation
· Deep expertise in procurement timing and regulatory requirements
· Transparent pricing and predictable timelines
We handle the complexity — so you can focus on your business.
Schedule Your Free Consultation to Review Eligibility
If your business is planning solar in 2025, now is the time to talk. FEOC restrictions could limit your options next year — but Safe Harbor gives you a clear, straightforward path to preserve the full 30% ITC.
Don’t let new FEOC rules reduce your solar ROI.
Schedule a Safe Harbor consultation with SunGreen Systems today:
👉 https://www.sungreensystems.com/contact
