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Solar, wind and energy storage projects can face federal tax credit compliance requirements including prevailing wage and apprenticeship (PWA), domestic content, prohibited foreign entity (PFE) restrictions commonly referred to as Foreign Entity of Concern (FEOC) requirements, and beginning of construction (BOC). The requirements depend on the credit, project type and project timeline.
Empact protects tax credit value by combining AI-enabled technology with specialized expertise to identify and resolve compliance issues and maintain the record for the life of the credit.
Clean energy tax credit compliance is no longer a reporting exercise. Compliance issues can put the value of a tax credit at risk at financing, during construction, at transfer or funding, and after a project begins operations. By the time an issue surfaces in diligence, the underlying sourcing, contracting or construction decision may have been made months or years earlier and can be difficult to correct.
Empact works from the original records, including certified payroll, contracts and supplier documentation, rather than summaries or attestations. NexusIQ™, Empact's AI-enabled compliance platform, reviews the evidence and identifies issues as they emerge. Dedicated compliance specialists work with the project team to resolve them and maintain the compliance record throughout the tax credit lifecycle.
| Credit | What it covers | What Empact manages |
|---|---|---|
| Section 48E, clean electricity investment credit | Investment in qualifying zero-emissions generation and storage facilities | PWA documentation, domestic content documentation where the bonus is pursued, PFE compliance across all applicable tests, beginning of construction evidence |
| Section 45Y, clean electricity production credit | Electricity produced by qualifying zero-emissions facilities | PWA documentation, domestic content documentation where the bonus is pursued, PFE compliance across all applicable tests, beginning of construction evidence, maintained across the credit period |
| Sections 48 and 45, legacy credits | Projects that began construction under the pre-2025 framework | PWA documentation, domestic content documentation where the bonus is pursued, PFE compliance across all applicable tests, beginning of construction evidence |
Tax rules and guidance continue to evolve. Applicable requirements depend on the credit, project type and project timeline.
Empact maintains the compliance record against the requirements applicable to each project.
Compliance obligations reach every party on a project. Empact works with each of them.
Solar, wind and energy storage projects can face federal tax credit compliance considerations including prevailing wage and apprenticeship (PWA), domestic content, prohibited foreign entity (PFE) restrictions commonly referred to as Foreign Entity of Concern (FEOC) requirements, and beginning of construction (BOC). Which requirements apply depends on the credit, project type and project timeline. Empact identifies compliance issues as work happens, works with the project team to resolve them, and maintains the compliance record throughout the tax credit lifecycle.
Section 45Y is a production-based credit for electricity produced by qualifying zero-emissions facilities. Section 48E is an investment-based credit for qualified investment in qualifying zero-emissions electricity facilities and energy storage technology. The credits generally apply to qualifying facilities or property placed in service after 2024, subject to project-specific requirements and limitations.
Prevailing wage and apprenticeship requirements can determine whether a taxpayer qualifies for the increased amount of certain clean energy tax credits, including Sections 45Y and 48E, unless an applicable exception applies. The requirements include wage, apprenticeship and recordkeeping obligations.
Federal law places restrictions on certain clean energy credits based on prohibited foreign entity (PFE) status and, for certain projects, material assistance from prohibited foreign entities. These restrictions are commonly referred to as FEOC requirements. They affect Sections 45Y and 48E, among other credits, and their application depends on factors including project timing and sourcing.
Compliance should be addressed early enough to capture required evidence as relevant sourcing, contracting and construction decisions occur. Beginning of construction dates can also have substantive tax consequences, particularly under the current rules governing wind and solar projects.
Empact manages federal clean energy tax credit compliance, identifying and resolving issues across projects and contractors.
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