How the One Big, Beautiful Bill Act shapes renewable energy credits while leaving doors open for foreign suppliers

OBBBA's challenge to non-US supply chains

US renewable energy projects face significant supply chain challenges under the One Big Beautiful Bill Act (OBBBA), signed into law on 04 July 2025, with foreign content dominating key materials across wind and solar technologies. 

According to the National Renewable Energy Laboratory's Renewable Energy Materials Properties Database (REMPD), the extent of foreign dependency is evident: China supplies 54% of the global steel and 63% of the cast iron used in wind installations, while controlling 57% of aluminium production for nacelles and cables. In solar photovoltaic systems, foreign suppliers dominate the production of critical components, including silicon cells, glass modules, and aluminium frames, with Asian manufacturers controlling most upstream production. 

Even seemingly abundant materials exhibit a non-US supply-chain concentration: electrical steel (essential for transformers) comes from South Korea and China – each accounting for 14%, while carbon fibre for turbine blades relies on US production for 28%, and Japan and China for 13% each. Solar installations face similar challenges. Crystalline silicon modules require aluminium frames primarily supplied from China (57% of global production), while module interconnections depend on copper conductors and specialised glass from concentrated international suppliers. 

OBBBA's domestic content requirements

The OBBBA fundamentally alters certain renewable energy tax credit eligibility by mandating domestic content thresholds that climb annually: 45% (27.5% for offshore wind facilities) if construction begins between 16 June 2025 and 31 December 2025; 50% (35% for offshore wind facilities) if construction begins in 2026; and 55% if construction begins after 31 December 2026. 

Project developers must meet these requirements or forfeit Clean Electricity Production Credits (Section 45Y Credits) and Clean Electricity Investment Credits (Section 48E Credits) entirely. Prohibited foreign entity (PFE) restrictions add complexity by barring any “material assistance” from Chinese, Russian, Iranian, or North Korean entities. 

OBBBA's Foreign Entity of Concern (FEOC) compliance challenges

The FEOC compliance framework represents the most complex regulatory development post-OBBBA. Technology-specific material assistance thresholds create differentiated requirements: solar technology requires 40% non-FEOC content in 2026, escalating to 60% post-2029, while energy storage systems face 55% for 2026, increasing to 75% after 2029. Section 45X manufacturing incentives impose variable requirements: solar equipment starts at 50% non-FEOC content, increasing to 85% post-2029, while wind equipment requires 85% for 2026 and 90% for 2027, with no 45X eligibility after 2027.

Entity classification establishes complex ownership and control tests beyond simple percentage calculations. Specified Foreign Entity (SFE) categories include entities with over 50% Chinese government ownership or control, and Foreign-Influenced Entity (FIE) classifications encompass single SFE ownership of 25% or aggregate SFE ownership of 40% or more. FEOC provisions prohibit payments under contracts or licensing arrangements providing SFEs effective control over taxpayers or projects. This requires analysis of contractual relationships, including elimination of unrestricted rights to determine electricity output timing, prohibition on exclusive rights to determine purchasers, and restrictions on exclusive maintenance or operational rights.

Supply chain considerations

Suppliers are now increasingly required to provide comprehensive representations and warranties regarding FEOC compliance, including detailed certifications with cost breakdown documentation. Large-scale manufacturers may need to develop sophisticated supply chain documentation systems leveraging their own trade case and tariff compliance experience, though smaller supplier networks face significant challenges managing complex regulatory documentation requirements.

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Dusko Stojkov is a principal attorney at Offit Kurman, advising on corporate and tax planning, M&A, renewable energy finance, and healthcare deals. He also guides clients on structuring, compliance, and nonprofit governance across industries.