FEOC / PFE Compliance

Know what your ownership, contracts, and supply chain mean for tax credit eligibility.

Empact combines NexusIQ®, its AI-native platform, with managed compliance services to review ownership, contracts, and supplier records, identify gaps, and document findings for your team and tax counsel.

Discuss Your ProjectSee the Review Areas

NexusIQ/FEOC Assessment: 150 MW Solar

In Progress
  • Ownership: Reviewed ✓
  • Effective Control: 2 contracts in review
  • Material Assistance: MACR calculated ✓
MACR 52%
Threshold 40%
  • Supplier certification received: Module supplier
  • BOM cost records mapped: 214 components
  • Licensing agreement flagged for counsel review

Illustrative example

Clients
60+
Projects Supported
800+
Tax Credit Value Supported
$5B+
Energy Capacity Supported
19+ GW
Specialists
80+

Supplier statements need supporting evidence.

Foreign Entity of Concern (FEOC) and prohibited foreign entity (PFE) restrictions can affect clean energy tax credit eligibility. Ownership, contractual rights, and component sourcing each require review.

The rules and effective dates vary by credit and restriction. Beginning construction before 2026 does not establish an exemption from every FEOC / PFE requirement.

Empact works directly with contractors and suppliers to correct incomplete or inaccurate records and resolve compliance issues before the documentation is used for procurement, financing, or tax credit diligence.

Ownership Records
Bill of Materials
Supply Contracts

Supplier Certification: Not a PFE

Illustrative

Ownership, Effective Control and Material Assistance

  1. Ownership

    Review entity structures, ownership interests, debt relationships, and officer appointment rights relevant to prohibited foreign entity status.

  2. Effective Control

    Review contracts and related arrangements for rights that may confer prohibited control over a facility, energy storage technology, or production activities.

  3. Material Assistance

    Review component and supplier records and calculate the Material Assistance Cost Ratio (MACR) against the relevant credit, technology, and year-specific threshold.

  4. Tax credit eligibility

What supports the compliance position?

Empact reviews supplier certifications alongside the records behind them, checking coverage, inconsistencies, and missing information.

  • Entity Records

    Ownership information, corporate relationships, and relevant entity screening.

  • Supplier Certifications

    The entities, products, components, and representations covered by each certification.

  • Component and Cost Records

    Bills of materials, manufacturer information, and cost records supporting the material assistance analysis.

  • Contracts and Related Arrangements

    Procurement, licensing, service, and other agreements relevant to effective control.

Reliance on a supplier certification depends on its contents and the governing rules.

From source records to a documented assessment.

  1. Step 01

    Collect

    Obtain entity, supplier, component, cost, and contract records.

  2. Step 02

    Assess

    Review the evidence across Ownership, Effective Control and Material Assistance.

  3. Step 03

    Address Gaps

    Work with project teams and suppliers to obtain missing evidence and evaluate next steps with tax counsel.

  4. Step 04

    Report

    Document findings, supporting records, outstanding questions, and actions taken.

Explore NexusIQ®

Why Empact

Highest-Quality Compliance

We review the records behind the reports.

Empact examines underlying entity, contract, component and cost records to identify gaps that supplier statements and summary reports alone can miss.

One Stop Compliance Shop

One partner for the requirements behind your credit.

Empact coordinates foreign entity review alongside the other compliance requirements your project carries, working directly with contractors and suppliers and maintaining the supporting records.

Empact services. Applicable requirements depend on the credit and project.

A documented assessment your team can act on.

  • Assessment findings, outstanding questions, and actions taken.
  • MACR calculations with documented inputs and methodology, where included in the engagement.
  • Supplier certifications and supporting records organized for project teams, tax counsel, and authorized reviewers.

Review changes in ownership, financing, contracts, and suppliers.

When ownership, financing, contracts, or suppliers change, Empact reviews the change and updates the record. How long monitoring is required depends on the credit and the restriction, and your engagement defines the scope.

A continuous review cycle. A trigger, which can be an ownership change, financing change, contract change, or supplier change, leads to the change being reviewed, then the record being updated, and the cycle repeats.

Which FEOC tests apply to your project?

Try the FEOC Calculator →

Choose the support your team needs.

  • Software

    Your team manages FEOC / PFE records in NexusIQ.

    • NexusIQ platform access
    • Document and issue tracking
    • Compliance reporting tools

  • Hybrid

    NexusIQ plus Empact specialists for selected assessments.

    • NexusIQ platform access
    • Specialist assessment support
    • Shared supplier follow-up

  • Fully Managed

    Empact runs the assessment process.

    • Entity, contract and cost record review
    • Supplier coordination
    • Findings and reporting

Define the review scope, supplier coordination, reporting, and ongoing support your project requires with Empact.

Discuss Your Project

Frequently Asked Questions

No. Foreign Entity of Concern and prohibited foreign entity are related terms with distinct statutory definitions. PFE is the umbrella term covering a specified foreign entity (SFE) or a foreign-influenced entity (FIE). The relevant tax-credit analysis depends on the specific provision.

No. Construction timing is relevant to certain material assistance rules, but it does not establish a blanket exemption from every ownership or effective control restriction.

Not necessarily. Its coverage, supporting information, and the conditions for relying on it need review. Other evidence may be required.

No. Domestic content bonus requirements and prohibited foreign entity restrictions are separate analyses. Satisfying one does not establish the other.

Not necessarily. The PWA correction and penalty procedures do not automatically apply. The consequences and available actions depend on the specific restriction and facts, so review your project’s exposure with tax counsel before relying on a corrective approach.

More questions? Visit our FAQ or read our FEOC Compliance Guide.

Review your project’s exposure before the next commitment.

Discuss your ownership structure, supplier documentation, contracts, and project timeline with Empact.

Talk to Empact