FEOC Rules and Floating Solar: What Changed in 2026
The prohibited foreign entity rules turned floating solar's most imported component into a tax-credit diligence question. Here is what changed, what it means for a float purchase, and what documentation to ask for.
What changed in 2026
From 2026, the federal investment tax credit is denied where specified critical components of a project are supplied by prohibited foreign entities. The rule reaches past the point of final assembly into the ownership and origin of the supply chain behind a component, so the answer to "is this component compliant" is a documentation question rather than an inspection question. A project cannot resolve it by looking at the hardware on the truck.
The practical consequence for floating solar is specific to this product category. The imported floats that dominate floating solar can create a tax-credit compliance question for a US project claiming the credit, because the structural component that defines the technology has historically been sourced overseas. In ground-mount solar a project team is already accustomed to interrogating module and cell origin; in floating solar the same team can arrive at diligence having treated the float package as ordinary steel-and-plastic procurement, with no supply-chain declaration on file for it.
That question has to be answered at diligence, not after commissioning. Once the array is on the water, the supplier decision is not reversible and the credit position is whatever the documentation supports. FloatSolar manufactures domestically in the United States and provides a supply-chain declaration on request, which is the document a project team files against this question for the structure scope.
The domestic content bonus threshold also moved
The domestic content bonus adder threshold stepped up to 50% for projects beginning construction in 2026, and to 55% for projects beginning construction in 2027 and later. A design that cleared an earlier threshold does not automatically clear the current one, so a project carried forward from a prior year needs its percentage recalculated against the threshold that applies to its own construction start.
| Construction begins | Domestic content threshold |
|---|---|
| 2026 | 50% |
| 2027 and later | 55% |
Racking and structural components contribute to the domestic cost percentage, but the calculation runs on the full bill of materials, including modules, inverters and the electrical balance of system. A domestically manufactured floating structure raises the percentage and supplies clean documentation for part of the bill of materials; it does not by itself carry a project over 50% or 55%. Any team modelling the bonus should build the calculation on the actual bill of materials for the project rather than on the origin of the most visible component. Domestic manufacturing and Build America Buy America documentation are covered separately on the Made in USA page.
Why the safe-harbour wave keeps this live for years
Safe harbour means establishing that construction began by a particular date, commonly by incurring a qualifying share of project cost through equipment purchases, so the project is evaluated against the rules in force at that point. Because a large pipeline of projects is banking equipment this way, purchasing continues for several years after the rule change rather than stopping at a single deadline.
The effect on sourcing is straightforward: buyers in that wave prefer domestic and compliance-clean equipment, because equipment bought to protect a credit is the last equipment anyone wants to be the reason the credit is later questioned. A float package purchased in 2026 may not reach the water for a year or more, and it will be reviewed with the documentation that existed at the time of purchase.
This page is not tax advice
FEOC applicability, domestic content percentages and credit eligibility are project-specific and are determined by the project's own tax and legal advisors on the full facts of the project. Nothing here states or implies that any project qualifies for any credit, adder or exemption.
FloatSolar's role is narrow and documentary: it supplies manufacturing and bill-of-materials documentation for the structure scope so that review can be performed on real information. FloatSolar does not provide tax advice and does not opine on a project's credit position.
What to ask a float supplier for
Four documents answer the structure portion of this review. Request them as a condition of the purchase order, because a supplier that cannot produce them at quoting is unlikely to produce them at audit.
- A written supply-chain declaration identifying the manufacturing origin of the structure
- A bill of materials for the structure kit at the level of detail your advisors need for the domestic cost calculation
- Manufacturing documentation sufficient for a Build America Buy America review, where the project is federally assisted
- Confirmation of the entity that manufactures the product, so ownership questions can be checked rather than assumed
Request the supply-chain declaration
We provide the supply-chain declaration and domestic-content documentation for the structure kit on request, per order, for your advisors to review.
Frequently Asked Questions
What does FEOC mean in solar?
FEOC stands for prohibited foreign entity of concern. From 2026, the federal investment tax credit is denied where specified critical components of a project are supplied by a prohibited foreign entity. The rule operates on the origin and ownership of the supply chain behind the components, not simply on where the final assembly happened, which is why it is answered with documentation rather than with a shipping label.
How do the 2026 FEOC rules affect floating solar specifically?
The imported floats that dominate the floating solar product category can create a tax-credit compliance question for a US project claiming the investment tax credit. Floating solar is unusual in that its defining structural component has historically been sourced overseas, so a project team that treats racking as a commodity line item can reach diligence without an answer for it. The question has to be resolved during diligence, not after commissioning, because by then the equipment is in the water and the credit position is fixed.
Can FloatSolar provide FEOC documentation?
Yes. FloatSolar manufactures domestically in the United States and provides a supply-chain declaration on request, along with bill-of-materials documentation for the structure kit. That documentation supports a project's own review; it is not a determination that a project qualifies for any credit.
What is the domestic content bonus threshold in 2026?
The domestic content bonus adder threshold stepped up to 50% for projects beginning construction in 2026, and rises to 55% for projects beginning construction in 2027 and later. A project that cleared the threshold under an earlier percentage does not automatically clear it under the current one, so a design carried over from a prior year should be recalculated against the applicable threshold.
Does floating solar racking count toward domestic content?
Racking and structural components contribute to the domestic cost percentage, but they do not determine it on their own. The calculation runs on the full bill of materials, including modules, inverters and the electrical balance of system, so a domestically manufactured structure improves the percentage while the modules and inverters usually move it more. Whether a specific project clears the applicable threshold is a calculation performed on that project's actual bill of materials.
Does buying domestic racking guarantee my project keeps the tax credit?
No. FEOC applicability, domestic content percentages and credit eligibility are project-specific and are determined by the project's own tax and legal advisors on the full facts of the project. Domestic manufacturing of one component category removes one source of exposure and supplies documentation for the review; it does not decide the outcome, and FloatSolar does not state that any project qualifies.
What is safe harbor and why does it matter for equipment buying in 2026?
Safe harbor refers to establishing that construction began by a particular date, commonly by incurring a qualifying share of project cost through equipment purchases, so a project is evaluated against the rules in force at that time. The resulting wave of safe-harbour purchasing means equipment buying continues for several years across a large pipeline of projects, and buyers in that wave increasingly prefer domestic and compliance-clean sourcing so the equipment they bank is not the reason a credit is later questioned.
When should FEOC exposure be checked on a floating solar project?
At diligence, before equipment is ordered. The cost of answering the question at procurement is a document request to the manufacturer; the cost of answering it after commissioning can be the credit itself, and by then the supplier decision cannot be changed. Project teams should ask each supplier for a written supply-chain declaration as a condition of the purchase order rather than as a follow-up.