SECTION 4. INTERIM SAFE

HARBORS

Section 7701(a)(52)(D)(iii)(II) provides two interim safe harbors that a taxpayer may choose to apply when determining a Clean Electricity MACR or Eligible Component MACR.

Section 7701(a)(52)(D)(iii)(II)(aa) permits a taxpayer to use the tables included in Notice 2025-08 to establish the percentage of the total direct costs of any listed eligible component and any MP. To effectuate this safe harbor, section 4.01 of this notice describes the Identification Safe Harbor that a taxpayer may use to identify MPs and MPCs of a Listed qualified facil

ity or EST or to identify Constituent Materials of a Listed eligible component, and section 4.02 this notice describes the Cost Percentage Safe Harbor that a taxpayer may use to determine Direct Costs and PFE Direct Costs for a qualified facility or EST or to determine the Direct Material Costs and PFE Direct Material Costs for an eligible component,

Section 7701(a)(52)(D)(iii)(II)(bb) permits a taxpayer to rely upon supplier certifications for certain information. To effectuate this safe harbor, section 4.03 of this notice describes the Certification Safe Harbor that a taxpayer may use to determine Direct Costs or Direct Material Costs, PFE Direct Costs or PFE Direct Material Costs, and whether MPs and MPCs are PFE Produced or Constituent Materials are PFE Sourced.

.01 Identification Safe Harbor . (1) In general . This section 4.01 describes the Identification Safe Harbor. A taxpayer may use the Identification Safe Harbor to identify MPs and MPCs of a Listed qualified facility or EST or to identify Constituent Materials of a Listed eligible component.

(2) Identification Safe Harbor require- ments for qualified facilities or ESTs.

(a) In general . A taxpayer may rely upon the Identification Safe Harbor to identify the types of MPs and MPCs of a qualified facility or EST only if the qualified facility or EST is listed as an “Applicable Project” in the 2023-2025 Safe Harbor Tables. For this purpose, in the 2023-2025 Safe Harbor Tables with cost percentages, the titles of the tables (for example, “Updated Table for Solar PV Ground-Mount”) or the column titled “Applicable Project” may be considered as listing the qualified facility or EST, the column titled “Applicable Project Component” or “APC” may be considered as listing the types of MPs within the qualified facility or EST (Listed MPs), and the column titled “Manufactured Product Component” or “MPC” may be considered as listing the types of MPCs within the qualified facility or EST (Listed MPCs). In the 2023-2025 Safe Harbor Tables without cost percentages, the column titled “Applicable Project Component” may be considered as listing the types of MPs and MPCs within the qualified facility or EST (Listed MPs and MPCs). ²⁷

27 The definitions provided in Notice 2025-08 for Applicable Project, APC, or MPCs are applicable.

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Harbor Tables without cost percentages, the column titled “Applicable Project Component” may be considered as identifying the types of Constituent Materials of the eligible component. If an eligible component is not listed in section 4.01(3)(d) of this notice, then the taxpayer may not treat the eligible component as a Listed eligible component, and therefore may not use the Identification Safe Harbor. See section 4.04(3) of this notice for an example of being unable to use the Identification Safe Harbor.

(b) Exclusive list . Except as provided in section 4.02(3)(b)(ii) of this notice, a taxpayer that uses the Identification Safe Harbor with respect to a Listed eligible component to identify Constituent Materials must use the Listed MPCs as the exclusive and exhaustive list of Constituent Materials. The requirements in the previous sentence apply regardless of whether property listed in the 2023-2025 Safe Harbor Tables is fully or fractionally owned or shared.

(c) Listed but unutilized . Any Listed MPC that is not utilized as an input to the Listed eligible component is disregarded for purposes of using the Identification Safe Harbor. For examples of calculating an Eligible Component MACR with listed but unutilized MPCs, see sections 4.04(2) and (5) of this notice.

(d) Listed eligible components and corresponding Applicable Project Com- ponents .

(i) In general . Subject to section 4.01(3) (d)(ii) of this notice, the following chart identifies the only eligible components defined in § 45X that may be treated as a Listed eligible component, along with the Applicable Project Component to which that eligible component must correspond to be treated as a Listed eligible component. If the eligible component is listed in more than one of the Notice 2025-08 tables, then the taxpayer must use the table for the Applicable Project that most closely reflects the reasonably anticipated use of the eligible component.

(b) Exclusive list . Except as provided in section 4.02(2)(b)(ii) of this notice, a taxpayer that uses the Identification Safe Harbor with respect to a Listed qualified facility or EST to identify types of MPs and MPCs must use the Listed MPs and Listed MPCs as the exclusive and exhaustive list of MPs and MPCs for that purpose. Any MPs or MPCs contained in the taxpayer’s qualified facility or EST that are not listed in an applicable 2023-2025 Safe Harbor Table are disregarded for purposes of using the Identification Safe Harbor. For examples of using the Identification Safe Harbor to help calculate a Clean Electricity MACR with unlisted but utilized MPs or MPCs that are disregarded, see section 4.04(2) and (5) of this notice. The requirements in the previous sentence apply regardless of whether property listed in the 2023-2025 Safe Harbor Tables is fully or fractionally owned or shared.

(c) Listed but unutilized MPs or MPCs . Any Listed MP or Listed MPC that is not utilized as an input to the taxpayer’s qualified facility or EST is disregarded for purposes of using the Identification Safe Harbor. For examples of calculating a Clean Electricity MACR with listed but unutilized MPs or MPCs, see sections 4.04(1) and (6) of this notice.

(d) Treatment of steel and iron . A taxpayer using the Identification Safe Harbor with respect to a Listed qualified facility or EST to identify types of MPs and MPCs disregards any item that is identified in the applicable table as “Steel/Iron” or a “Steel/Iron Product.” As described in section 3.01(7)(b) of this notice, any steel or iron components incorporated into the taxpayer’s qualified facility or EST are disregarded for purposes of calculating a Clean Electricity MACR.

(e) 80/20 Rule . (i) In general . A taxpayer that owns a facility that is a qualified facility by virtue of the 80/20 Rule may be unable to determine the source of any used property that is part of the facility. Accordingly, a

taxpayer disregards any used property for purposes of using the Identification Safe Harbor for any such facility.

(ii) Partially replaced property . In applying the Identification Safe Harbor to any facility that is a qualified facility by virtue of the 80/20 Rule, if the facility includes a mix of new and used property of the same type of Listed MP or Listed MPC, the taxpayer may not disregard the new property for purposes of using the Identification Safe Harbor. ²⁸ For example, if a taxpayer replaces some, but not all, used PV modules with new PV modules in their solar facility that is a qualified facility by virtue of the 80/20 rule, the taxpayer may not disregard the new PV modules as a Listed MP for purposes of using the Identification Safe Harbor. See section 4.04(6) of this notice for an example of using the Identification Safe Harbor with partially replaced property.

(f) Qualified interconnection property . A taxpayer may not use the Identification Safe Harbor with respect to qualified interconnection property because the 2023-2025 Safe Harbor Tables list only MPs and MPCs for qualified facilities as defined in § 48E(b)(3), and qualified interconnection property is not part of a qualified facility as defined in § 48E(b)(3).

(3) Identification Safe Harbor require- ments for eligible components .

(a) In general . A taxpayer may rely upon the Identification Safe Harbor to identify types of Constituent Materials (as defined in section 3.02(1) of this notice) only if the eligible component is a Listed eligible component in section 4.01(3) (d) of this notice. For this purpose, in the 2023-2025 Safe Harbor Tables with cost percentages, the column titled “Applicable Project Component” or “APC” may be considered as identifying the eligible component, and the column titled “Manufactured Product Component” or “MPC” may be considered as identifying the type of Constituent Materials of the Listed eligible component. In the 2023-2025 Safe

28 Except as provided in section 4.02(2)(b)(v) of this notice, for purposes of determining Total Direct Costs and Total PFE Direct Costs, only costs paid or incurred with respect to new property will be included to compute the Clean Electricity MACR.

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Listed MPCs as the exclusive and exhaustive set of costs for that purpose. Any MPs or MPCs contained in the taxpayer’s qualified facility or EST that are not listed in an applicable 2023-2025 Safe Harbor Table are disregarded for purposes of using the Cost Percentage Safe Harbor. For examples of using the Cost Percentage Safe Harbor to calculate a Clean Electricity MACR with unlisted but utilized MPs or MPCs, see sections 4.04(1) and (6) of this notice. The requirements in this section 4.02(2)(b) apply regardless of whether property listed in the 2023-2025 Safe Harbor Tables is fully or fractionally owned or shared.

(ii) Listed but unutilized MPs or MPCs . Any Listed MP or Listed MPC that is not utilized as an input to the taxpayer’s qualified facility or EST is disregarded for purposes of using the Cost Percentage Safe Harbor. For examples of calculating a Clean Electricity MACR with listed but unutilized MPs or MPCs, see sections 4.04(1) and (6) of this notice. (iii) Treatment of steel and iron . A taxpayer using the Cost Percentage Safe Harbor for a Listed qualified facility or EST may disregard any item that is identified in the applicable table as a “Steel/ Iron” or “Steel/Iron Product” for purposes of using this safe harbor. As described in section 3.01(7)(b) of this notice, any steel

(ii) Special requirements for battery modules . Battery modules using battery cells may be treated as a Listed eligible component upon first meeting the requirements of § 45X(c)(5)(B)(iii)(I)(aa), (c)(5) (B)(iii)(II), and (c)(5)(B)(iii)(III), notwithstanding when this transformation occurs in a manufacturing production chain. However, consistent with the definition of an Applicable Project Component in section 3.01(2)(a) of Notice 2023-38, only battery modules that are “directly incorporated” into a distributed battery energy storage system or a grid-scale battery energy storage system, as those facilities are defined in section 7.03(6) and (9) of Notice 2025-08, may be treated as Listed eligible components under the “Updated Table for Battery Energy Storage System” in section 7.02 of Notice 2025-08.

.02 Cost Percentage Safe Harbor . (1) In general . This section 4.02 describes the Cost Percentage Safe Harbor. A taxpayer may use the Cost Percentage Safe Harbor to determine Direct Costs, determine PFE Direct Costs, and calculate the Clean Electricity MACR only if the (i) the taxpayer is using the Identification Safe Harbor with respect to such qualified facility or EST and (ii) the qualified facility or EST satisfies the requirements of section 4.02(2) of this notice. A taxpayer may use the

Cost Percentage Safe Harbor to determine Direct Material Costs, determine PFE Direct Material Costs, and calculate the Eligible Component MACR only if (i) the taxpayer is using the Identification Safe Harbor with respect to such eligible component and (ii) the eligible component satisfies the requirements of section 4.02(3) of this notice. The Cost Percentage Safe Harbor is not used to determine whether an MP, MPC, or Constituent Material is PFE Produced or PFE Sourced.

(2) Cost Percentage Safe Harbor requirements for qualified facilities or ESTs .

(a) In general . In lieu of determining Direct Costs, determining PFE Direct Costs, and calculating the Clean Electricity MACR in the manner specified in section 3.01 of this notice, a taxpayer can instead determine Direct Costs, determine PFE Direct Costs, and calculate the Clean Electricity MACR by using the Cost Percentage Safe Harbor as described in section 4.02(2)(c) of this notice.

(b) Specific requirements for using 2023-2025 Safe Harbor Tables . (i) Exclusive list . Except as provided in section 4.02(2)(b)(ii) and (v) of this notice, a taxpayer that uses the Cost Percentage Safe Harbor with respect to a Listed qualified facility or EST must use the Assigned Cost Percentages of the Listed MPs and

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or iron components incorporated into the taxpayer’s qualified facility or EST are disregarded for purposes of calculating a Clean Electricity MACR.

(iv) Incremental Production Rule . The 2023-2025 Safe Harbor Tables are designed to provide cost percentages for different types of MPs and MPCs that are included in an entirely new qualified facility. Using those tables in the context of a facility which is a qualified facility by virtue of the Incremental Production Rule, which may consist of only a small fraction of the components that are included in an entire new qualified facility, can generate results inconsistent with the purpose of the material assistance rules under § 7701(a) (52). Accordingly, a taxpayer may not use the Cost Percentage Safe Harbor for any such facility.

(v) 80/20 Rule . (A) In general . A taxpayer that owns a facility that is a qualified facility by virtue of the 80/20 Rule may be unable to determine the source of any used property which is part of the facility. Accordingly, a taxpayer disregards any used property for purposes of using the Cost Percentage Safe Harbor for any such facility.

(B) Partially replaced property . In applying the Cost Percentage Safe Harbor to any facility that is a qualified facility by virtue of the 80/20 Rule, a taxpayer must use the entire Assigned Cost Percentages for Listed MPs and Listed MPCs for any new property which is part of the facility. For example, if a taxpayer were to replace only 5 out of 9 Blades in a land-based wind facility that is a qualified facility by virtue of the 80/20 Rule, the taxpayer must use the 31.2% Assigned Cost Percentage attributable to Blades, without adjustment based on partial replacement of the Blades, for purposes of using the Cost Percentage Safe Harbor. See section 4.04(6) of this notice for an example of using the Cost Percentage Safe Harbor with partially replaced property.

(vi) Qualified interconnection prop- erty . As described in section 4.01(2)(e) of this notice, a taxpayer may not use the

Identification Safe Harbor with respect to qualified interconnection property. To use the Cost Percentage Safe Harbor, a taxpayer must also use the Identification Safe Harbor. Accordingly, a taxpayer may not use the Cost Percentage Safe Harbor with respect to qualified interconnection property.

(c) Application of Cost Percentage Safe Harbor to qualified facilities and ESTs . A taxpayer using the Cost Percentage Safe Harbor will calculate a Clean Electricity MACR using the following steps. For an example of using the Cost Percentage Safe Harbor to calculate a Clean Electricity MACR, see section 4.04(1) of this notice.

(i) Step one: Identify MPs and MPCs using the Identification Safe Harbor . To determine the Clean Electricity MACR using the Cost Percentage Safe Harbor, a taxpayer must first identify MPs and MPCs using the Identification Safe Harbor, as described in section 4.01(2) of this notice.

(ii) Step two: Track MPs and MPCs . To determine the Clean Electricity MACR using the Cost Percentage Safe Harbor, a taxpayer must track only whether each MP or MPC incorporated into the qualified facility or EST was PFE Produced, as described in section 3.01(3) of this notice.

(iii) Step three: determine Total Per- centage . Next, in lieu of determining Direct Costs and Total Direct Costs in the manner described in section 3.01(4)(a) of this notice, a taxpayer using the Cost Percentage Safe Harbor determines Total Direct Costs by summing the Assigned Cost Percentages for each Listed MPC and the Assigned Cost Percentages for Production of each Listed MP within the Applicable Project (Total Percentage). The Assigned Cost Percentages for MPs and MPCs listed in the 2023-2025 Safe Harbor Tables will sum to a Total Percentage of 100% unless the taxpayer has listed but unutilized MPs or MPCs or the 80/20 Rule applies. ²⁹

(iv) Step four: determine Total PFE Percentage . Then, in lieu of determining PFE Direct Costs and PFE Total Direct

Costs in the manner described in section 3.01(5) of this notice, a taxpayer using the Cost Percentage Safe Harbor determines PFE Total Direct Costs by summing the Assigned Cost Percentages for each Listed MPC that is PFE Produced and Assigned Cost Percentages for Production of each Listed MP that is PFE Produced within the Applicable Project (Total PFE Percentage). If an MP is PFE Produced, but some or all of the MPCs included in the MP are not PFE Produced, then the taxpayer includes in the Total PFE Percentage the Assigned Cost Percentages for Production of the MP plus the Assigned Cost Percentages for each PFE Produced MPC. If an MP is not PFE Produced, but some or all of the MPCs included in the MP are PFE Produced, then the taxpayer only includes in the Total PFE Percentage the Assigned Cost Percentages for the PFE Produced MPCs.

(v) Step five: determine Clean Elec- tricity MACR . After determining the Total Percentage and Total PFE Percentage, a taxpayer using the Cost Percentage Safe Harbor determines the Clean Electricity MACR by subtracting the Total PFE Percentage from the Total Percentage and then dividing that result by the Total Percentage. If the Clean Electricity MACR is less than the applicable threshold percentage, then the qualified facility or EST includes material assistance from a PFE.

(3) Cost Percentage Safe Harbor requirements for eligible components .

(a) In general . In lieu of determining Direct Material Costs, determining PFE Direct Material Costs, and calculating the Eligible Component MACR in the manner specified in section 3.02 of this notice, a taxpayer can instead determine Direct Material Costs, determine PFE Direct Material Costs, and calculate the Eligible Component MACR by using the Cost Percentage Safe Harbor described in section 4.02(3)(b) and (c) of this notice. (b) Specific requirements for using 2023-2025 Safe Harbor Tables for § 45X eligible components .

29 As described in section 4.02(2)(b)(ii) of this notice, the Assigned Cost Percentages for listed but unutilized MPs or MPCs are disregarded from the determination of a Clean Electricity MACR. See sections 4.04(1) and (6) of this notice for an example of using the Cost Percentage Safe Harbor to calculate a Clean Electricity MACR for a facility with listed but unutilized MPs or MPCs. Additionally, as described in section 4.02(2)(b)(v) of this notice, any used property in a facility that is a qualified facility by virtue of the 80/20 Rule is disregarded from the determination of a Clean Electricity MACR. See section 4.04(6) of this notice for an example of using the Cost Percentage Safe Harbor to calculate a Clean Electricity MACR for a facility that is a qualified facility by virtue of the 80/20 rule.

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Credit ; Form 3468, Investment Credit ; Form 7207, Advanced Manufacturing Production Credit ; or any other applicable form for claiming a § 45Y, 48E, or 45X credit filed with the taxpayer’s annual return submitted to the IRS for the first taxable year in which the taxpayer claims a credit for a qualified facility, EST, or eligible component. See section 2.05 of this notice for rules regarding substantiation under § 6001. Additionally, under § 7701(a)(52)(D)(iii)(IV), any certification, must (aa) include (AA) the supplier’s employer identification number, or (BB) any such similar identification number issued by a foreign government, (bb) be signed under penalties of perjury, (cc) be retained by the supplier and the taxpayer for a period of not less than six years and must be provided to the Secretary upon request, and (dd) be from the supplier from which the taxpayer purchased any MP, eligible component, or constituent elements, materials, or subcomponents of an eligible component, stating–(AA) that such property was not produced or manufactured by a PFE and that the supplier does not know (or have reason to know) that any prior supplier in the chain of production of that property is a PFE, (BB) for purposes of § 45X, the total direct material costs for each component, constituent element, material, or subcomponent that were not produced or manufactured by a PFE, or (CC) for purposes of § 45Y or § 48E, the total direct costs attributable to all MPs that were not produced or manufactured by a PFE.

(b) Requirements for Certification Safe Harbor. The direct supplier may certify either (1) the total direct costs to the taxpayer or the total direct material costs paid or incurred by the taxpayer, as applicable, of such MP, MPC, eligible component, or Constituent Material that was not PFE Produced or PFE Sourced, as applicable, or (2) that such MP, MPC, eligible component, or Constituent Material was not PFE Produced or PFE Sourced, as applicable. See sections 4.04(4) and (5) of this notice for examples applying the Certification Safe Harbor.

(c) Inaccurate certifications . A taxpayer may rely on a certification described in section 4.03(2)(b) for the purposes described in section 4.03(1) of this notice unless the taxpayer knows or has reason to

(i) Exclusive list . Except as provided in section 4.02(3)(b)(ii) of this notice, a taxpayer that uses the Cost Percentage Safe Harbor with respect to a Listed eligible component to determine Direct Material Costs must use the Listed MPCs as the exclusive and exhaustive set of Constituent Materials for that purpose. Any Constituent Material contained in the taxpayer’s eligible component which is not listed as an MPC in the applicable 2023-2025 Safe Harbor Table is disregarded for purposes of using the Cost Percentage Safe Harbor. For examples of using the Cost Percentage Safe Harbor to calculate an Eligible Component MACR with unlisted but utilized MPCs, see sections 4.04(2) and (5) of this notice.

(ii) Listed but unutilized MPCs . Any Listed MPC that is not utilized as an input to the Listed eligible component is disregarded for purposes of using the Cost Percentage Safe Harbor. For examples of calculating an Eligible Component MACR with listed but unutilized MPCs, see sections 4.04(2) and (5) of this notice.

(c) Application of Cost Percentage Safe Harbor to eligible components . A taxpayer using the Cost Percentage Safe Harbor will calculate an Eligible Component MACR using the following steps.

(i) Step one: Identify Constituent Mate- rials using the Identification Safe Harbor . To determine the Eligible Component MACR using the Cost Percentage Safe Harbor, a taxpayer must first identify types of Constituent Materials included in the Listed Eligible Component using the Identification Safe Harbor, as described in section 4.01(3) of this notice.

(ii) Step two: Track Constituent Mate- rials . To determine the Eligible Component MACR using the Cost Percentage Safe Harbor, a taxpayer must only track whether each Constituent Material incorporated into the eligible component was PFE Sourced, as described in section 3.02(5) of this notice. (iii) Step three: determine Total Per- centage . Next, in lieu of determining Direct Material Costs and Total Direct Material Costs in the manner described in section 3.02(4)(a) of this notice, a taxpayer using the Cost Percentage Safe Harbor determines Total Direct Material Costs by summing the Assigned Cost Percentages for each Listed MPC included in

the Listed eligible component (Total Percentage).

(iv) Step four: determine Total PFE Percentage . Then, in lieu of determining PFE Direct Material Costs and PFE Total Direct Material Costs in the manner described in section 3.02(5) of this notice, a taxpayer using the Cost Percentage Safe Harbor determines PFE Total Direct Material Costs by summing the Assigned Cost Percentages for each Listed MPC that is PFE Sourced and included in the Listed eligible component (Total PFE Percentage).

(v) Step five: determine Eligible Com- ponent MACR . After determining the Total Percentage and Total PFE Percentage, the taxpayer will determine the Eligible Component MACR by subtracting the Total PFE Percentage from the Total Percentage and then dividing that result by the Total Percentage. If the Eligible Component MACR is less than the applicable threshold percentage, then the eligible component includes material assistance from a PFE.

.03 Certification Safe Harbor . (1) In general . This section 4.03 describes the Certification Safe Harbor. In lieu of determining Direct Costs or Direct Material Costs and PFE Direct Costs or PFE Direct Material Costs in the manners specified in sections 3.01(4)(a), 3.02(4)(a), 3.01(5)(a) and (c), and 3.02(5)(a) and (c) of this notice, a taxpayer can instead determine Direct Costs or Direct Material Costs by using the Certification Safe Harbor as described in section 4.03(2) of this notice. In addition, in lieu of determining whether MPs and MPCs are PFE Produced or Constituent Materials are PFE Sourced in the manners specified in sections 3.01(5)(b) and 3.02(5)(b) of this notice, a taxpayer can instead determine whether MPs and MPCs are PFE Produced or Constituent Materials are PFE Sourced by using the Certification Safe Harbor as described in section 4.03(2) of this notice.

(2) Requirements to be a valid certifi- cation .

(a) In general . The certifications described in section 4.03(2)(b) of this notice must be prepared in a manner consistent with § 1.45X-4(c)(4)(i), meaning that any certifications must be attached to Form 7211, Clean Electricity Production

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know that such certification is inaccurate. Where the taxpayer knows (or has reason to know) that an MP, MPC, eligible component, or Constituent Material was PFE Produced or PFE Sourced the taxpayer must treat all direct costs or direct material costs, as applicable, with respect to such property as PFE Produced or PFE Sourced.

.04 Examples . The provisions of this section are illustrated by the following examples. In each example, assume that the taxpayer uses the calendar year as the taxpayer’s taxable year.

(1) Example 1: calculating Clean Electricity MACR using the Identification Safe Harbor and Cost Percentage Safe Harbor .

(a) In taxable year 2026, Taxpayer D purchases a 50-megawatt direct current ground-mounted PV (tracker) (Facility) and places the Facility in service. Construction of the Facility began in calendar year 2026. Under § 7701(a)(52)(B)(i)(I), the Facility includes material assistance from a PFE if the Clean Electricity MACR with respect to the Facility

is less than 40%. Taxpayer D would like to use the Identification Safe Harbor and the Cost Percentage Safe Harbor to calculate a Clean Electricity MACR and determine whether its Facility includes material assistance from a PFE.

(b) Taxpayer D first uses the identification Safe Harbor to identify MPs and MPCs. Taxpayer D identifies the Applicable Project in the Notice 2025-08 Table for “Updated Table for Solar PV GroundMount,” that corresponds to the Facility. Taxpayer D disregards the table rows for Steel pile or Steel ground screw and Steel or Iron reinforcing products in foundation and identifies 3 MPs in the column for Ground-mount (Tracking): PV modules (65.8%), Inverters (5.5%), and PV trackers (28.7%). The Facility’s PV modules do not include Bypass Diodes (0.4%) (that is, listed but unutilized), but do include heat sensors (that is, unlisted but utilized).

(c) Taxpayer D next tracks whether each Listed MP or Listed MPC identified in the previous step was PFE Produced. With respect to the PV modules’ MPCs, Taxpayer D knows that only the cells were PFE Produced; no additional Listed MPCs incorporated into the PV Modules were PFE Produced. With respect to the PV modules as an MP, Taxpayer D also knows that the PV modules were not PFE Produced.

Additionally, Taxpayer D knows that the inverters and PV trackers, including each of the Listed MPCs within the inverters and PV trackers that were incorporated into the inverters and PV trackers, were not PFE Produced.

(d) Taxpayer D then uses the Cost Percentage Safe Harbor to aggregate the Assigned Cost Percentages and determine a Total Percentage. Taxpayer D sums the Assigned Cost Percentages for each of the identified MPs, disregarding Bypass Diodes, to determine a Total Percentage of 99.6% (65.8% + 5.5% + 28.7% - 0.4%) (Total Percentage). (e) Taxpayer D next uses the Cost Percentage Safe Harbor to aggregate the Assigned Cost Percentages attributable to PFE Produced MPs and MPCs and determines a Total PFE Percentage. The Assigned Cost Percentage for the only PFE Produced MP or MPC is 38.0% for the PFE Produced Cells (Total PFE Percentage).

(f) Taxpayer D calculates the Clean Electricity MACR of the Facility, disregarding Bypass Diodes and heat sensors, as follows: (99.6% [Total Percentage] – 38.0% [Total PFE Percentage]) / 99.6% [Total Percentage] = 61.8%. The Clean Electricity MACR of 61.8% is not less than the applicable threshold percentage (40%).

Clean Electricity MACR

(c) Taxpayer E next tracks whether each Listed MPC identified in the previous step was PFE Sourced. Taxpayer E knows that 800 out of 1000 Cells incorporated in each Solar Module were PFE Sourced and that no additional Constituent Materials incorporated into the Solar Modules and listed as an MPC in the “Updated Table for Solar PV GroundMount” for a PV module were PFE Sourced.

(d) Taxpayer E then uses the Cost Percentage Safe Harbor to aggregate Assigned Cost Percentages and determine a Total Percentage and Total PFE Percentage. Taxpayer E sums the Assigned Cost Percentages for each of the MPCs listed within the PV Module, plus Production of the PV Module, disregarding Bypass Diodes and heat sensors, to determine a Total Percentage of 65.4% (38.0% + 6.0% + 6.0% + 3.8% + 3.8% + 1.0% + 0.3% + 0.3% + 1.5%

• 0.4% + 4.7% - 0.4%).

(e) To determine Total PFE Percentage, Taxpayer E determines the Assigned Cost Percentage attributable to the PFE Sourced Cells by multiplying the Assigned Cost Percentage for Cells (38.0%) by the percentage of such Cells that were PFE Sourced (800 out of 1000 = 80%), which equals 30.4% (Total PFE Percentage).

(g) Taxpayer D’s Facility does not include material assistance from a PFE and, therefore, § 48E(b) (6) does not prohibit Taxpayer D from claiming the credit under § 48E for the Facility.

(2) Example 2: calculating Eligible Component MACR using the Identification Safe Harbor and the Cost Percentage Safe Harbor .

(a) In taxable year 2026, Taxpayer E produces and sells 100 solar modules (within the meaning of § 45X(c)(3)(B)(v)) (Solar Modules) to an unrelated person. Under § 7701(a)(52)(C)(i)(I)(aa), the Solar Modules include material assistance from a PFE if the Eligible Component MACR with respect to the Solar Modules is less than 50%. Taxpayer E would like to use the Identification Safe Harbor and the Cost Percentage Safe Harbor to calculate an Eligible Component MACR and determine whether its Solar Modules include material assistance from a PFE.

(b) Taxpayer E determines the Solar Modules may be treated as a Listed eligible component by relying on section 4.01(3)(d)(i) of this notice, which identifies solar modules as defined in § 45X(c)(3) (B)(v) as a Listed eligible component. As a result, Taxpayer E may use the Identification Safe Harbor to identify Constituent Materials and use the

Assigned Cost Percentages of the MPCs listed for PV module to determine Total Direct Material Costs. Taxpayer E finds that PV module is a Listed eligible component in two separate Notice 2025-08 tables: “Updated Table for Solar PV Ground-Mount” and the “Updated Table for Solar PV Rooftop”. Taxpayer E knows that the Solar Modules do not have domestic c-Si PV Cells or domestic wafers and will be used in a Solar PV Ground-mount (Tracking) and so must use the column “Ground-mount (Tracking)” to identify Assigned Cost Percentages for the Solar Modules. A PV module identified in the “Groundmount (Tracking)” column of the “Updated Table for Solar PV Ground-Mount” consists of 10 MPCs: Cells (38.0%), Frame/Backrail (6.0%), Front Glass (6.0%), Encapsulant (3.8%), Backsheet/Backglass (3.8%), Junction Box (1.0%), Edge Seals (0.3%), Pottants (0.3%), Bus Ribbons (1.5%), and Bypass Diodes (0.4%). The Solar Modules do not include Bypass Diodes (that is, listed but unutilized), but do include heat sensors (that is, unlisted but utilized). In addition to these MPCs and Assigned Cost Percentages, the Ground-mount (Tracking) column provides that Production of a PV module for such an Applicable Project has an Assigned Cost Percentage of 4.7%.

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(f) Taxpayer E calculates the Eligible Component MACR as follows: (65.4% [Total Percentage]

• 30.4% [Total PFE Percentage]) / 65.4% [Total PFE Percentage] = 53.5%. The Eligible Compo

Eligible Component MACR

nent MACR of 54.0% is not less than the applicable threshold percentage (50%).

(g) Taxpayer E’s Solar Modules do not include material assistance from a PFE, and thus satisfy the requirements of § 45X(c)(1)(C), therefore, § 45X(c) (1)(C) does not prohibit Taxpayer E from claiming the credit under § 45X for the Solar Modules.

(3) Example 3: unable to rely on the Cost Per- centage Safe Harbor .

(a) In taxable year 2026, Taxpayer F produces and sells 100 PV cells to an unrelated person (PV Cells). Under § 7701(a)(52)(C)(i)(I)(aa), the PV Cells include material assistance from a PFE if the Eligible Component MACR with respect to the PV Cells is less than 50%. Taxpayer F would like to use the Identification Safe Harbor and the Cost Percentage Safe Harbor to calculate an Eligible Component MACR and determine whether its PV Cells include material assistance from a PFE.

(b) Taxpayer F first uses the Identification Safe Harbor to identify Constituent Materials. To determine whether a PV cell may be treated as a Listed eligible component, Taxpayer F determines whether a PV cell that is an eligible component under § 45X(c)(3)(A)(ii) may be treated as a Listed eligible component under section 4.01(3)(d)(i) of this notice. A PV cell that qualifies as an eligible component under § 45X(c)(3)(A) (ii) is not listed in section 4.01(3)(d)(i) of this notice, and so Taxpayer F may not treat the PV Cells as a Listed eligible component. Because a PV Cell may not be treated as a Listed eligible component, Taxpayer F is unable to rely on the Identification Safe Harbor to identify Constituent Materials or the Cost Percentage Safe Harbor to calculate an Eligible Component MACR for the PV Cells and determine whether its PV Cells include material assistance from a PFE.

(c) Taxpayer F may still rely on the Certification Safe Harbor or the guidance provided in section 3.02 of this notice to calculate the Eligible Component MACR.

(4) Example 4: calculating Clean Electricity MACR using the Identification Safe Harbor and the Certification Safe Harbor .

(a) Assume the same facts provided in Example 1, except that Taxpayer D decides to rely on the Identification Safe Harbor and the Certification Safe Harbor, instead of the Cost Percentage Safe Harbor, to calculate a Clean Electricity MACR and determine whether its Facility includes material assistance from a PFE.

(b) Taxpayer D first identifies the Facility as an Applicable Project in the Notice 2025-08 Table for “Updated Table for Solar PV Ground-Mount”. The Facility’s PV modules do not include Bypass Diodes (that is, listed but unutilized), but do include heat sensors (that is, unlisted but utilized). Taxpayer D disregards the table rows for Applicable Project Components categorized as Steel/Iron, disregards Bypass Diodes and heat sensors, and identifies the following MPs for the Applicable Project Solar PV Ground-mount (Tracking): PV tracker, PV module (which includes the following MPCs: Cells, Frame/ Backrail, Front Glass, Encapsulant, Backsheet/Backglass, Junction Box, Edge Seals, Pottants, and Bus Ribbons), and Inverter.

(c) Disregarding the costs associated with the Bypass Diodes and heat sensors, the sum of Taxpayer D’s Direct Costs attributable to the MPs identified is $3,000 (Total Direct Costs). Of the $3,000 in Total Direct Costs, $2,400 is attributable to the PV

modules, and the PV tracker and inverter account for the remaining $600 of the Total Direct Costs.

(d) Taxpayer D obtains a certification from each supplier of the Facility’s identified MPs. Taxpayer D does not know or have reason to know that any of the certifications are inaccurate.

(e) The supplier of the PV modules certifies that Taxpayer D’s Direct Costs for such PV modules, including MPCs, that were not produced or manufactured by a PFE, is $1,320. Accordingly, Taxpayer D treats $1,080 of its Total Direct Costs for the PV modules as attributable to production by a PFE ($2,400 - $1,320).

(f) The supplier of the inverters and the supplier of the PV trackers each certify that such MPs were not produced or manufactured by a PFE and that the supplier does not know (or have reason to know) that a prior supplier of any MPC in the chain of production of such MPs is a PFE. Accordingly, Taxpayer D treats $0 of its Direct Costs for the PV tracker and inverter as attributable to production by a PFE ($600

• $600). Taxpayer D determines PFE Total Direct Costs of $1,080 by adding its Direct Costs for the PV modules that are attributable to production by a PFE and its Direct Costs for the PV tracker and inverter that are attributable to production by a PFE ($1,080

• $0).

(g) Taxpayer D calculates the Clean Electricity MACR as follows: ($3,000 [Total Direct Costs]

• $1,080 [PFE Total Direct Costs]) / $3,000 [Total Direct Costs] = 64%. The Clean Electricity MACR of 64% is not less than the applicable threshold percentage (40%).

Clean Electricity MACR

Bulletin No. 2026–11 679 March 9, 2026

(h) Taxpayer D’s Facility does not include material assistance from a PFE and thus satisfies the requirements of § 48E(b)(6), therefore, § 48E(b) (6) does not prohibit Taxpayer D from claiming the credit under § 48E for the Facility.

(5) Example 5: calculating Eligible Component MACR using the Identification Safe Harbor and the Certification Safe Harbor .

(a) Assume the same facts provided in Example 2, except that Taxpayer E decides to rely on the Identification Safe Harbor and the Certification Safe Harbor, instead of the Cost Percentage Safe Harbor, to calculate an Eligible Component MACR and determine whether its Solar Modules include material assistance from a PFE.

(b) Taxpayer E uses the Notice 2025-08 Table for “Updated Table for Solar PV Ground-Mount” to

identify the Constituent Materials of the Listed eligible component. The Solar Modules do not include Bypass Diodes (that is, listed but unutilized), but do include heat sensors (that is, unlisted but utilized). Taxpayer E disregards Bypass Diodes and heat sensors. Taxpayer E identifies the following Constituent Materials: Cells, Frame/Backrail, Front Glass, Encapsulant, Backsheet/Backglass, Junction Box, Edge Seals, Pottants, and Bus Ribbons.

(c) Disregarding the costs associated with the heat sensors, the sum of Taxpayer E’s Direct Material Costs attributable to the identified Constituent Materials is $2,000 (Total Direct Material Costs).

(d) Taxpayer E obtains certifications from each direct supplier of the identified Constituent Materials. Taxpayer E does not know or have reason to know that the certifications are inaccurate.

(e) The direct suppliers of the Constituent Materials certify that Taxpayer E’s total direct material costs for such Constituent Materials that were not produced or manufactured by a PFE is $900. Accordingly, Taxpayer E treats $1,100 of its Total Direct Material Costs as attributable to Constituent Materials that are PFE Sourced ($2,000 - $900) (PFE Total Direct Material Costs).

(f) Taxpayer E calculates the Eligible Component MACR as follows: ($2,000 [Total Direct Material Costs] – $1,100 [PFE Total Direct Material Costs]) / $2,000 [Total Direct Material Costs] = 45%. The Eligible Component MACR of 45% is less than the applicable threshold percentage (50%).

Eligible Component MACR

(g) Taxpayer E’s Solar Modules include material assistance from a PFE and thus do not satisfy the requirements of § 45X(c)(1)(C), therefore, § 45X(c) (1)(C) prohibits Taxpayer E from claiming the credit under § 45X for the Solar Modules.

(6) Example 6: calculating Clean Electricity MACR using the Identification Safe Harbor and the Cost Percentage Safe Harbor for a qualified facility that meets the 80/20 Rule .

(a) In taxable year 2026, Taxpayer G partially replaced the PV modules in an existing 100-megawatt direct current ground-mounted PV (tracking) and installed new corresponding PV trackers (Facility). Taxpayer G retained the existing inverters and PV trackers and PV modules that were not replaced. The fair market value of the used property is not more than 20 percent of the Facility’s total value (calculated by adding the cost of the new property to the value of the used property). Taxpayer G placed the Facility into service in 2026. Under § 7701(a)(52)(B)(i)(I), the Facility includes material assistance from a PFE if the Clean Electricity MACR with respect to the Facility is less than 40%. Taxpayer G would like to use the Identification Safe Harbor and the Cost Percentage Safe Harbor to calculate a Clean Electricity MACR and determine whether its Facility includes material assistance from a PFE.

(b) Taxpayer G first uses the Identification Safe Harbor to identify MPs and MPCs. Taxpayer G identifies the Facility as an Applicable Project in the Notice 2025-08 Table for “Updated Table for Solar PV Ground-Mount.” Taxpayer G disregards the table rows for Steel pile or Steel ground screw and Steel or Iron reinforcing products in foundation and

identifies 3 MPs in the column for Ground-mount (Tracking): PV modules (65.8%), Inverters (5.5%), and PV trackers (28.7%). The “Updated Table for Solar PV Ground-Mount” identifies a PV module as consisting of 10 MPCs, identified in the column for Ground-mount (Tracking): Cells (38.0%), Frame/ Backrail (6.0%), Front Glass (6.0%), Encapsulant (3.8%), Backsheet/Backglass (3.8%), Junction Box (1.0%), Edge Seals (0.3%), Pottants (0.3%), Bus Ribbons (1.5%), and Bypass Diodes (0.4%). The same table identifies a PV Tracker as consisting of 7 MPCs, identified in the column for Ground-mount (Tracking): Torque tube (11.0%), Structural Fasteners (0.4%), Drive System (1.9%), Dampers (0.5%), Actuator (2.8%), Controller (0.7%), and Rails (2.0%). In addition to these MPCs and Assigned Cost Percentages, the Ground-mount (Tracking) column provides that Production of a PV module for such an Applicable Project has an Assigned Cost Percentage of 4.7% and that Production of a PV Tracker has an Assigned Cost Percentage of 9.4%.

(c) Taxpayer G next tracks whether each Listed MP or Listed MPC identified in the previous step was PFE Produced. Multiple new PV modules were incorporated into the Facility. Taxpayer G knows that during taxable year 2026, 6 out of 10 new PV modules (and all of their constituent MPCs) were PFE produced, and that the remaining 4 out of 10 new PV modules (and all of their constituent MPCs) were not PFE produced. Additionally, Taxpayer G knows that the new PV trackers were PFE Produced, and that, of the identified MPCs for a PV tracker, only the new Rails were PFE Produced.

(d) Taxpayer G next uses the Cost Percentage Safe Harbor to aggregate the Assigned Cost

Percentages and determine a Total Percentage. Even though Taxpayer G only partially replaced the Facility’s PV Modules and accompanying PV Trackers, because the Facility is a qualified facility by virtue of the 80/20 rule, Taxpayer G uses the Assigned Cost Percentages without adjustment to determine a Total Percentage and Total PFE Percentage. Taxpayer G sums the Assigned Cost Percentages for each of the identified MPs, disregarding the Inverters (which are entirely used property), to determine a Total Percentage of 94.5% (65.8% + 28.7% + 5.5% - 5.5%). (e) Taxpayer G next uses the Cost Percentage Safe Harbor to aggregate the Assigned Cost Percentages attributable to PFE Produced MPs and MPCs and determine a Total PFE Percentage. To determine Total PFE Percentage, Taxpayer G determines the Assigned Cost Percentage attributable to the PFE Produced new PV modules by multiplying the Assigned Cost Percentage for PV modules (65.8%) by the percentage of such PV modules, including MPCs, that were PFE Produced (6 out of 10 = 60%), which equals 39.5%. Taxpayer G adds the Assigned Cost Percentage attributable to the PFE Produced new PV modules (39.5%) to the Assigned Cost Percentages attributable to production of the new PV Trackers by a PFE (9.4%) and the PFE Produced new Rails (2.0%) to equal a Total PFE Percentage of 50.9% (39.5% + 9.4% + 2.0%). (f) Taxpayer G calculates the Clean Electricity MACR of the Facility as follows: (94.5% [Total Percentage] - 50.9% [Total PFE Percentage]) / 94.5%

[Total Percentage] = 46.1%. The Clean Electricity MACR of 46.1% is not less than the applicable threshold percentage (40%).

March 9, 2026 680 Bulletin No. 2026–11

Clean Electricity MACR

.02 Establishment of rules to prevent entities from evading, circumventing, or abusing the application of the PFE restrictions .

Pursuant to the grants of authority provided to the Secretary under § 7701(a) (51)(D) and (K), the Treasury Department and the IRS intend to propose regulations to prevent entities from evading, circumventing, or abusing the application of restrictions with respect to PFEs under § 7701(a)(51), including rules to prevent such evasion, circumvention, or abuse through transfers or alterations of rights, property, or both, including transfers or alterations resulting in lapses of restricted foreign ownership or control that are temporary in nature.

(g) Taxpayer G’s Facility does not include material assistance from a PFE and thus satisfies the requirements of § 48E(b)(6), therefore, § 48E(b) (6) does not prohibit Taxpayer G from claiming the credit under § 48E for the Facility.