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What tax credit compliance requirements apply to solar and energy storage projects?

Clean Energy Compliance

Manage the requirements behind your tax credit.

Solar and energy storage projects face compliance requirements that vary by credit, project type and timeline. Empact combines NexusIQ®, its AI-native platform, with managed compliance services to identify and resolve issues and maintain the supporting record.

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Requirements depend on the credit, project type and timeline.

Project Type

Choose your project type.

Building solar plus storage? Both pages apply.

Solar Energy Storage

Compliance Record

The claim depends on the underlying records.

A compliance issue may surface at financing or transfer long after the work or sourcing decision behind it. Empact reviews the evidence and works with project teams to resolve identified issues and documentation gaps.

  1. 01

    Underlying records

    Payroll, timekeeping, contracts and supplier documentation.

  2. 02

    Review and resolution

    NexusIQ reviews the evidence and identifies issues. Empact validates the supporting records and coordinates resolution.

  3. 03

    Compliance record

    Findings, actions taken and outstanding items organized for project teams and authorized reviewers.

Credits

Which credits apply

Clean energy credits, qualifying activities and the compliance records Empact manages
CreditWhat it coversWhat Empact manages
Section 48E, clean electricity investment creditInvestment in qualifying zero-emissions generation and energy storage facilities.PWA documentation, including prevailing wage records for alteration and repair work during the recapture period; FEOC / PFE compliance, including ongoing review where required; beginning of construction evidence; domestic content documentation where the bonus is pursued.
Section 45Y, clean electricity production creditElectricity produced and sold by qualifying zero-emissions facilities.PWA documentation, including prevailing wage records for alteration and repair work during the credit period; FEOC / PFE compliance across the applicable tests; beginning of construction evidence; domestic content documentation where the bonus is pursued.
Sections 48 and 45, legacy creditsProjects that began construction before 2025 under the former investment and production credits.PWA documentation, beginning of construction evidence supporting legacy credit eligibility, and domestic content documentation where the bonus is pursued.

The FEOC / PFE restrictions apply to Sections 45Y and 48E, not to the legacy Section 45 and 48 credits. Tax rules and guidance continue to evolve, and applicable requirements depend on the credit, project type and project timeline.

Empact maintains the compliance record against the requirements applicable to each project.

What Empact Manages

Our Approach

Why Empact

Highest-Quality Compliance

We review the underlying records, not just the reports.

NexusIQ reviews underlying records to identify gaps that summary reports and self-certifications alone can miss. Empact validates the evidence and carries identified issues through resolution.

One Stop Compliance Shop

Every requirement behind your tax credit, one partner.

Empact works directly with contractors and suppliers and maintains the supporting records.
  • PWA
  • FEOC / PFE
  • Beginning of Construction
  • Domestic Content
  • State Compliance

Guaranteed Outcomes

Certified compliance, backed by a financial guarantee.

Empact resolves identified PWA issues, certifies compliance, and stands behind its work with a financial guarantee.

For qualifying fully managed PWA engagements. Compliance certification is within the engagement scope.

Engagement

Engagement options

Choose NexusIQ software, a hybrid engagement or fully managed compliance services based on the contractor coordination, supplier documentation and reporting your project needs.

  • Software
  • Hybrid
  • Fully Managed
Discuss Your Project

Empact will be first on my list to contact if we ever need to procure these types of services for ourselves in the future! Best response time and understanding of the nuts and bolts by far!

Audra UherDirector of AccountingNortheastern REMC

FAQ

Frequently Asked Questions

Solar and energy storage projects can face federal and state compliance requirements, including prevailing wage and apprenticeship (PWA), Foreign Entity of Concern (FEOC) / prohibited foreign entity (PFE) requirements, beginning of construction (BOC), domestic content and state labor requirements. 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, and prevailing wage requirements can continue for alteration and repair work after a facility is placed in service.

Federal law restricts certain clean energy credits, including Sections 45Y and 48E, based on prohibited foreign entity (PFE) status, effective control and, for certain projects, material assistance from prohibited foreign entities. Foreign Entity of Concern (FEOC) and PFE are related terms with distinct definitions. The legacy Section 45 and 48 credits are not subject to these restrictions. How the rules apply depends on project timing, ownership and sourcing.

Start early enough to capture evidence as sourcing, contracting and construction decisions occur. Beginning of construction dates can have significant tax consequences, particularly under the current rules for solar projects.

More questions? Visit our FAQ.

Next Step

Know what supports your clean energy tax credit.

Discuss your project's credits, timeline and compliance records with Empact.

Talk to Empact