Domestic Content Bonus Credit Amounts under the Inflation Reduction Act of 2022: First Updated Elective Safe Harbor modifying Notice 2024-41

Part III – Administrative, Procedural, and Miscellaneous

Domestic Content Bonus Credit Amounts under the Inflation Reduction Act of 2022:

First Updated Elective Safe Harbor modifying Notice 2024-41

Notice 2025-08

SECTION 1. PURPOSE

This notice provides an updated elective safe harbor for the domestic content

bonus credit (First Updated Elective Safe Harbor) that modifies the safe harbor provided

in IRS Notice 2024-41, 2024-24 I.R.B. 1615 (Notice 2024-41), including the table

provided in section 4.04(1)-(3) (Table 1), in the five ways described below in section 3 of

this notice. Table 1 provided the Assigned Cost Percentages for each Manufactured

Product and Manufactured Product Component to provide taxpayers clarity in applying

the new elective safe harbor (New Elective Safe Harbor) outlined in Notice 2024-41.

Taxpayers, including entities that make elective payment elections under § 6417 of the

Internal Revenue Code (Code),1 may elect to use the First Updated Elective Safe

Harbor in lieu of the Domestic Manufactured Products and Components Cost and Total

Manufactured Products Cost provisions of the Adjusted Percentage Rule in section

1 Unless otherwise specified, all “section” or “§” references are to sections of the Code or the Income Tax

Regulations (26 CFR part 1).

- 2 -

3.03(2)(b) and (c) of Notice 2023-38, 2023-22 I.R.B. 872 (Notice 2023-38), which

require taxpayers to use the manufacturer’s direct costs of producing Manufactured

Products and Manufactured Product Components in an Applicable Project.2 Taxpayers

who elect to use the First Updated Elective Safe Harbor for any Applicable Project must

use one of the respective tables provided below in sections 5-7 of this notice subject to

the conditions described in section 8 of this notice, also provided below.

SECTION 2. BACKGROUND

Public Law 117-169, 136 Stat

ctured

Products and Manufactured Product Components in an Applicable Project.2 Taxpayers

who elect to use the First Updated Elective Safe Harbor for any Applicable Project must

use one of the respective tables provided below in sections 5-7 of this notice subject to

the conditions described in section 8 of this notice, also provided below.

SECTION 2. BACKGROUND

Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly known as the

Inflation Reduction Act of 2022 (IRA), amended §§ 45 and 48 to provide a domestic

content bonus credit amount for certain qualified facilities or energy projects placed in

service after December 31, 2022, and added new §§ 45Y and 48E, which include a

domestic content bonus credit amount for certain investments in qualified facilities or

energy storage technologies placed in service after December 31, 2024.

.01 Notice 2023-38. On May 12, 2023, the Treasury Department and the IRS

released Notice 2023-38, which states that the Treasury Department and the IRS intend

to propose regulations for rules that taxpayers must satisfy to qualify for the domestic

content bonus credit amounts under §§ 45, 45Y, 48, and 48E. Notice 2023-38 also

describes a safe harbor regarding the classification of certain Applicable Project

Components in representative types of qualified facilities, energy projects, or energy

storage technologies.

.02 Notice 2024-41. On May 24, 2024, the Treasury Department and the IRS

released Notice 2024-41, which, among other things, modified the existing domestic

2 Unless otherwise specified, capitalized terms used throughout this notice are defined in Notice 2023-38

and Notice 2024-41. The term “Applicable Project” includes a qualified facility described in § 45Y(b)(1)(C)

or § 48E(b)(3)(B)(i)

.02 Notice 2024-41. On May 24, 2024, the Treasury Department and the IRS

released Notice 2024-41, which, among other things, modified the existing domestic

2 Unless otherwise specified, capitalized terms used throughout this notice are defined in Notice 2023-38

and Notice 2024-41. The term “Applicable Project” includes a qualified facility described in § 45Y(b)(1)(C)

or § 48E(b)(3)(B)(i).

- 3 -

content safe harbor in Notice 2023-38 by (i) expanding the non-exclusive list of

Applicable Projects in “Table 2--Categorization of Applicable Project Components” from

Notice 2023-38 to include hydropower and pumped hydropower storage facilities; (ii)

replacing “Utility scale photovoltaic system” with “Ground-mount and rooftop

photovoltaic system”; and (iii) including certain Manufactured Product Components for

previously listed Applicable Projects.

Notice 2024-41 further provided an elective safe harbor in Table 1 of section

4.04(1)-(3) that taxpayers may use to classify the identified Applicable Project

Components. Table 1 also provided the Assigned Cost Percentages for each of the

identified Manufactured Products and Manufactured Product Components that may be

found in the identified Applicable Projects, which include solar photovoltaic (PV)

systems, land-based wind facilities, and battery energy storage technologies. The

Assigned Cost Percentage for each of the identified Manufactured Products and

Manufactured Product Components in Table 1 was obtained from DOE for purposes of

calculating the Domestic Cost Percentage and satisfying the Adjusted Percentage Rule

and will be accepted by the IRS for those Manufactured Products and Manufactured

Product Components for taxpayers that are eligible to rely on Notice 2024-41. Finally,

Notice 2024-41 provided requirements for taxpayers that elect to use the New Elective

Safe Harbor to classify the identified Applicable Project Components listed in Table 1

and to calculate the Domestic Cost Percentage.

SECTION 3

will be accepted by the IRS for those Manufactured Products and Manufactured

Product Components for taxpayers that are eligible to rely on Notice 2024-41. Finally,

Notice 2024-41 provided requirements for taxpayers that elect to use the New Elective

Safe Harbor to classify the identified Applicable Project Components listed in Table 1

and to calculate the Domestic Cost Percentage.

SECTION 3. OVERVIEW OF MODIFICATIONS TO NOTICE 2024-41

The First Updated Elective Safe Harbor modifies Notice 2024-41 in five ways.

- 4 -

First, section 5 of this notice provides several modifications to Notice 2024-41,

including expanding the Solar PV Table of Table 1 into two distinct tables, one for

Photovoltaic (PV) Ground-mount (Tracking and Fixed) Applicable Projects and one for

PV Rooftop (MLPE and String) Applicable Projects, and providing updated associated

cost percentages for each table (Updated Assigned Cost Percentages for PV Solar)3,

including those within the new columns in each table that provide a second set of

associated cost percentages for employing PV modules that incorporate crystalline

silicon photovoltaic (c-Si PV) cells and wafers that are manufactured in the United

States. See sections 5.05 and 5.06 of this notice. The Updated Assigned Cost

Percentages for PV Solar provided in the new columns specific to projects that use c-Si

PV cells made with domestically produced wafers increase accuracy beyond Table 1 by

accounting for the expected significant cost premium this type of cell would carry. There

are no additional associated cost percentages for other types of PV cells because DOE

assesses that the existing cost percentages, as updated in this notice, adequately

capture the costs of other types of PV cells

e c-Si

PV cells made with domestically produced wafers increase accuracy beyond Table 1 by

accounting for the expected significant cost premium this type of cell would carry. There

are no additional associated cost percentages for other types of PV cells because DOE

assesses that the existing cost percentages, as updated in this notice, adequately

capture the costs of other types of PV cells.

Second, section 6 of this notice modifies the Land-Based Wind Table from Table

1 by renaming the term (i) “Steel or iron rebar in foundation,” which is listed as an

Applicable Project Component in Table 1, to “Steel or iron reinforcing products in

foundation,” and (ii) the term “Material,” which is listed as a Manufactured Product

Component in Table 1, to “Preform.” Regarding the associated cost percentages for

3 For purposes of the First Updated Elective Safe Harbor, the Updated Assigned Cost Percentages for PV

Solar, defined in section 3 of this notice, the associated cost percentages for the Land-Based Wind, which

are the same cost values as the Assigned Cost Percentages provided in Notice 2024-41, and the

Updated Assigned Cost Percentages for BESS, defined in section 7 below, are collectively defined as the

Updated Assigned Cost Percentages.

- 5 -

land-based wind components, the First Updated Elective Safe Harbor’s values (Updated

Assigned Cost Percentages for Land-Based Wind) are the same values as the Assigned

Cost Percentages for the Land-Based Wind Table in Table 1. This notice uses the same

values because DOE, using analysis from the national laboratories, found only minor

changes in the component cost data underlying the Assigned Cost Percentages for the

Land-Based Wind Table in Table 1. For this reason, DOE did not independently publish

updates to this data

re the same values as the Assigned

Cost Percentages for the Land-Based Wind Table in Table 1. This notice uses the same

values because DOE, using analysis from the national laboratories, found only minor

changes in the component cost data underlying the Assigned Cost Percentages for the

Land-Based Wind Table in Table 1. For this reason, DOE did not independently publish

updates to this data.

Third, section 7 of this notice provides several modifications to Notice 2024-41,

including providing updated assigned cost percentages for the Manufactured Products

and Manufactured Product Components relating to the Battery Electric Storage System

(BESS) (Updated Assigned Cost Percentages for BESS), which Table 1 provided as the

Assigned Cost Percentages for the (3) Battery Electric Storage System (BESS). Like

the Assigned Cost Percentages, the Updated Assigned Cost Percentages apply to both

grid-scale BESS and distributed BESS Applicable Projects.

Fourth, section 4 of the First Updated Elective Safe Harbor provides that a

taxpayer with a qualified facility under § 45 or energy project under § 48 that is placed in

service after December 31, 2022, and that meets the 80/20 Rule, or a qualified facility

under §§ 45Y or 48E or energy storage technology under § 48E that is placed in service

after December 31, 2024, and that meets the 80/20 Rule, may use the classifications

and cost percentages in Table 1 or the First Updated Elective Safe Harbor (as

applicable) to qualify for the domestic content bonus credit amount.

- 6 -

Fifth, the First Updated Elective Safe Harbor provides updated definitions for

representative types of Applicable Projects and definitions for certain Applicable Project

Components and Manufactured Product Components.

SECTION 4

ons

and cost percentages in Table 1 or the First Updated Elective Safe Harbor (as

applicable) to qualify for the domestic content bonus credit amount.

- 6 -

Fifth, the First Updated Elective Safe Harbor provides updated definitions for

representative types of Applicable Projects and definitions for certain Applicable Project

Components and Manufactured Product Components.

SECTION 4. CLARIFICATION ON APPLICATION OF TABLES

A taxpayer may elect to use the classifications and cost percentages in Table 1 of

Notice 2024-41 or the First Updated Elective Safe Harbor (as applicable) to qualify for

the domestic content bonus credit amount for Applicable Projects of the specific types

identified in Table 1 or the First Updated Elective Safe Harbor that are eligible for a

credit under sections 45, 45Y, 48, or 48E by virtue of the 80/20 Rule. For example, as

provided for in Notice 2023-38, an Applicable Project that is eligible for a credit under

sections 45, 45Y, 48, or 48E by virtue of the 80/20 Rule is eligible for a domestic content

bonus credit amount if the new property in the Applicable Project meets the Domestic

Content Requirement and the taxpayer complies with the requirements described in the

notice. To determine the Domestic Cost Percentage for such an Applicable Project, the

taxpayer may use the classifications and cost percentages in Table 1 or the First

Updated Elective Safe Harbor (as applicable). Only new U.S. Manufactured Products

and U.S. Components of the Applicable Project that are listed in Table 1 of Notice 2024-

41 or of this First Updated Elective Safe Harbor (as applicable) would be considered in

the calculation of the Domestic Cost Percentage (with no changes to those tables’

percentages)

cost percentages in Table 1 or the First

Updated Elective Safe Harbor (as applicable). Only new U.S. Manufactured Products

and U.S. Components of the Applicable Project that are listed in Table 1 of Notice 2024-

41 or of this First Updated Elective Safe Harbor (as applicable) would be considered in

the calculation of the Domestic Cost Percentage (with no changes to those tables’

percentages). All other Manufactured Products or Manufactured Product Components,

including the used property in an Applicable Project that qualifies as originally placed in

service by virtue of the 80/20 Rule, will be treated as foreign-sourced Manufactured

Products or Manufactured Product Components solely for purposes of calculating the

Domestic Cost Percentage when applying the New Elective Safe Harbor in Notice 2024-

- 7 -

41, and for applying the First Updated Elective Safe Harbor in this notice, and must take

a zero value consistent with section 4.03(3) in Notice 2024-41 and section 8.03(3) of

this notice. In such cases, new property may be considered in the calculation of the

Domestic Content Percentage if it meets the definition of a U.S. Manufactured Product

(as defined in section 3.03(1) of Notice 2023-38, including being produced in the United

States), or a U.S. Component (as defined in section 3.03(2)(b) in Notice 2023-38,

including being mined, produced, or manufactured in the United States). Furthermore,

to meet the Domestic Content Requirement, such Applicable Projects must also satisfy

the Steel or Iron Requirement with respect to only new Applicable Project Components

that are specified as subject to the Steel or Iron Requirement in Table 1 of Notice 2024-

41 or this First Updated Elective Safe Harbor (as applicable).

The modification to Notice 2024-41 described in this section does not extend a

taxpayer’s ability to rely on Notice 2024-41, as described in section 11 of this notice.

SECTION 5

equirement with respect to only new Applicable Project Components

that are specified as subject to the Steel or Iron Requirement in Table 1 of Notice 2024-

41 or this First Updated Elective Safe Harbor (as applicable).

The modification to Notice 2024-41 described in this section does not extend a

taxpayer’s ability to rely on Notice 2024-41, as described in section 11 of this notice.

SECTION 5. MODIFICATIONS TO TABLE 1 FOR SOLAR PV; GROUND-MOUNT AND

ROOFTOP

.01 Modifications to Table 1 for Solar PV; Expanded Tables. The First Updated

Elective Safe Harbor modifies Table 1 for Solar PV in section 4.04(1) of Notice 2024-41

by expanding it into two distinct tables to provide the Updated Assigned Cost

Percentages for PV Solar for both types of ground-mount photovoltaic systems and

both types of rooftop photovoltaic systems. See tables in sections 5.05 and 5.06 of

this notice. DOE calculated the Updated Assigned Cost Percentages for PV Solar

using its new ground-mount and rooftop PV component costs for 2024, which DOE

derived from cost data from a variety of sources, including datasets of system

characteristics, price indices, U.S. survey data from the government (for example, the

- 8 -

U.S. Bureau of Labor Statistics, Department of Labor) and private sector, public filings

from corporations, and comprehensive interviews of manufacturers, installers,

developers, and owners of the representative technologies. In addition, DOE used

data collected from three different national laboratories to generate the Updated

Assigned Cost Percentages for PV Solar, rather than a single national laboratory

survey that DOE relied upon for the methodology used to generate the Assigned Cost

Percentages in Table 1.

.02 Addition of New Columns

installers,

developers, and owners of the representative technologies. In addition, DOE used

data collected from three different national laboratories to generate the Updated

Assigned Cost Percentages for PV Solar, rather than a single national laboratory

survey that DOE relied upon for the methodology used to generate the Assigned Cost

Percentages in Table 1.

.02 Addition of New Columns. The First Updated Elective Safe Harbor further

modifies Table 1 for Solar PV in section 4.04(1) of Notice 2024-41 by adding a new

column with a second set of Updated Assigned Cost Percentages for each type of

ground-mount PV system and each type of rooftop PV system. This alternative set of

Updated Assigned Cost Percentages can be used if a PV system has PV modules that

incorporate c-Si PV cells and wafers manufactured within the United States. These

additional Updated Assigned Cost Percentages were incorporated to reflect the

significant cost premium this type of cell would carry relative to other types of domestic

cells, such as those with foreign wafers or domestic thin-film cells. These new

columns include values based on DOE’s estimates of underlying direct costs for a

domestically produced module containing c-Si PV cells made from domestically

produced c-Si wafers. The Updated Assigned Cost Percentages for PV Solar are from

DOE’s Quarterly Solar Industry Update (publication pending), which are derived from a

DOE-led effort that uses data collected from national laboratories.

The Treasury Department and the IRS, in consultation with DOE, implemented

the updates described after review of the comments received in response to the

- 9 -

request for comments made in Notice 2024-41, which highlighted the expected cost

premium incurred from procuring domestically produced c-Si PV cells made with

domestically produced silicon wafers

ected from national laboratories.

The Treasury Department and the IRS, in consultation with DOE, implemented

the updates described after review of the comments received in response to the

- 9 -

request for comments made in Notice 2024-41, which highlighted the expected cost

premium incurred from procuring domestically produced c-Si PV cells made with

domestically produced silicon wafers. Based on this review and consultation with

DOE, the Treasury Department and the IRS concluded that, due to the expected cost

premium associated with domestically produced silicon wafers, Table 1 could

misrepresent the expected costs of domestically produced c-Si PV cells made with

these wafers, thereby reducing Table 1’s accuracy. This inaccuracy could risk under-

crediting a component whose value is, to a significant extent, created domestically,

while over-crediting other components within the table.

Given these considerations, the Treasury Department and the IRS, in

consultation with DOE, have determined that it is appropriate to provide taxpayers the

option of using a cost safe harbor that more specifically reflects the cost of c-Si PV

cells produced with domestically produced wafers.

.03 Renaming of Certain Components. The First Updated Elective Safe Harbor

further modifies Table 1 for Solar PV in section 4.04(1) of Notice 2024-41 by renaming

the following Applicable Project Components and Manufactured Product Components.

With respect Applicable Project Components: (i) “Pile or ground screw” is renamed

“Steel pile or steel ground screw” for consistency with the description of other items

categorized as a steel/iron product, and (ii) “Steel or iron rebar in foundation” is

renamed “Steel or iron reinforcing products in foundation” to better reflect its function

and to clarify that non-rebar steel or iron reinforcement is also covered

le Project Components: (i) “Pile or ground screw” is renamed

“Steel pile or steel ground screw” for consistency with the description of other items

categorized as a steel/iron product, and (ii) “Steel or iron rebar in foundation” is

renamed “Steel or iron reinforcing products in foundation” to better reflect its function

and to clarify that non-rebar steel or iron reinforcement is also covered.

With respect to Manufactured Product Components: (i) “Climate Control” is

renamed “Thermal Management System”; (ii) “Enclosure” is renamed “Enclosure &

- 10 -

Skids” for the Inverter Applicable Project Component of both types of ground-mount

photovoltaic systems; (iii) “Fasteners” is renamed “Structural Fasteners”; (iv) “Slew

Drive” is renamed “Drive System”; and (v) “Motor” is renamed “Actuator” to better

reflect each Manufactured Product Component’s function by providing specificity.

.04 Redefining, Recategorizing, and Reclassifying Certain Components. The

following changes were made after consultation with DOE and review of stakeholder

feedback: First, the First Updated Elective Safe Harbor revises the definition of: (i)

“Ground-mounted PV (fixed-tilt)” to clarify that it includes canopy steel racking

structures and structures floating on a body of water; (ii) “Ground-mounted PV

(tracker)” to clarify that it includes structures floating on a body of water; and (iii)

“Rooftop PV (MLPE)” to clarify that it refers to a system where the microinverters or

DC-optimizers regulate the DC electricity from each of its solar PV modules

independently before the electricity is converted into alternating current electricity.

Second, the First Updated Elective Safe Harbor clarifies that the Manufactured

Product Component “Electrical Parts” for ground-mount PV systems includes the

following components that are not on printed circuit board (PCB) assemblies: control

transformers, capacitors, inductors, bus/cables, circuit protection

dependently before the electricity is converted into alternating current electricity.

Second, the First Updated Elective Safe Harbor clarifies that the Manufactured

Product Component “Electrical Parts” for ground-mount PV systems includes the

following components that are not on printed circuit board (PCB) assemblies: control

transformers, capacitors, inductors, bus/cables, circuit protection.

Third, as provided in the table in section 5.06 of this notice, the First Updated

Elective Safe Harbor removes “Electrical Parts for rooftop PV systems,” and adds their

costs to “Printed Circuit Board Assemblies” (DC-DC) and “Printed Circuit Board

Assemblies” (DC-AC).4

4 The abbreviated terms “DC” and “AC” are generally industry accepted terms meaning “Direct Current”

and “Alternating Current,” respectively.

- 11 -

Fourth, for “Solar PV Rooftop”, the First Updated Elective Safe Harbor

categorizes DC-to-DC and DC-to-AC “Printed Circuit Board Assemblies” as separate

Manufactured Products Components, and the domestic “Printed Circuit Board

Assemblies” that perform both functions (that is, convert both DC to DC and DC to AC)

can get credit for each cost percentage.5

Fifth, "Adhesives,” which is listed as a Manufactured Product Component for PV

Solar in Table 1, is removed from the First Updated Elective Safe Harbor to avoid

redundancy and confusion because “Pottants” and “Edge Seals,” which are listed as

Manufactured Product Components within the First Updated Elected Safe Harbor, are

also adhesives. As such, to reflect the removal of “Adhesives” within the Updated

Assigned Cost Percentages for PV Solar, the Treasury Department and the IRS, in

consultation with DOE, increased the associated cost percentage for both “Pottants”

and “Edge Seals”. See tables in section 5.05 and 5.06 of this notice

anufactured Product Components within the First Updated Elected Safe Harbor, are

also adhesives. As such, to reflect the removal of “Adhesives” within the Updated

Assigned Cost Percentages for PV Solar, the Treasury Department and the IRS, in

consultation with DOE, increased the associated cost percentage for both “Pottants”

and “Edge Seals”. See tables in section 5.05 and 5.06 of this notice.

.05 Updated Table for Solar PV Ground-Mount

APC

MPC

Ground-

mount

(Tracking)

Ground-

mount

(Tracking)

with

Domestic

c-Si PV

Cells &

Domestic

Wafers

Ground-

mount

(Fixed)

Ground-

mount

(Fixed) with

Domestic

c-Si PV

Cells &

Domestic

Wafers

PV module

Cells

38.0

51.6

53.2

66.6

Frame/Backrail

6.0

4.7

8.5

6.1

Front Glass

6.0

4.7

8.4

6.1

Encapsulant

3.8

3.0

5.4

3.8

Backsheet/Backglass 3.8

3.0

5.4

3.8

5 Larger inverters, such as those in most ground-mount applications, have fundamentally different

architectures than smaller inverters. As such, DOE assessed that a similar change would not improve the

accuracy of the cost percentages for ground-mount PV systems.

- 12 -

Junction Box

1.0

0.8

1.4

1.0

Edge Seals

0.3

0.2

0.4

0.3

Pottants

0.3

0.2

0.4

0.3

Bus Ribbons

1.5

1.2

2.1

1.5

Bypass Diodes

0.4

0.3

0.6

0.4

Production6

4.77

3.77

6.77

4.87

Inverter

Printed Circuit Board

Assemblies

2.4

1.7

3.1

2.2

Electrical Parts

0.8

0.6

1.1

0.8

Thermal Management

System

0.5

0.4

0.7

0.5

Enclosure & Skids

0.6

0.5

0.9

0.6

Production

1.27

0.97

1.77

1.27

PV Tracker Torque tube

11.0

8.6

-

-

Structural Fasteners

0.4

0.3

-

-

Drive System

1.9

1.5

-

-

Dampers

0.5

0.4

-

-

Actuator

2.8

2.2

-

-

Controller

0.7

0.6

-

-

Rails

2.0

1.6

-

-

Production

9.47

7.37

-

-

Steel

photovoltaic

module

racking

-

-

-

Steel/Iron

Product

Steel/Iron

Product

Steel pile or

Steel ground

screw

-

Steel/Iron

Product

Steel/Iron

Product

Steel/Iron

Product

Steel/Iron

Product

Steel or Iron

reinforcing

pr

e System

1.9

1.5

-

-

Dampers

0.5

0.4

-

-

Actuator

2.8

2.2

-

-

Controller

0.7

0.6

-

-

Rails

2.0

1.6

-

-

Production

9.47

7.37

-

-

Steel

photovoltaic

module

racking

-

-

-

Steel/Iron

Product

Steel/Iron

Product

Steel pile or

Steel ground

screw

-

Steel/Iron

Product

Steel/Iron

Product

Steel/Iron

Product

Steel/Iron

Product

Steel or Iron

reinforcing

products in

foundation

-

Steel/Iron

Product

Steel/Iron

Product

Steel/Iron

Product

Steel/Iron

Product

Total

-

100

100

100

100

.06 Updated Table for Solar PV Rooftop

6 Although “Production” is listed under the column for Manufactured Product Components (MPCs), it is not

an MPC. “Production” refers to the production cost of the relevant Applicable Project Component (APC)

that is a Manufactured Product and can only be included in the Domestic Cost Percentage if all of the

Manufactured Product Components of that Manufactured Product APC are domestically produced. See

section 3.03(2) of Notice 2023-38.

7 Consistent with Notice 2023-38, the direct cost of producing a Manufactured Product counts toward the

Domestic Cost Percentage only if all its Manufactured Product Components are domestically produced.

- 13 -

APC

MPC

Rooftop

(MLPE)

Rooftop

(MLPE) with

Domestic c-

Si PV cells &

Domestic

Wafers

Rooftop

(String)

Rooftop

(String) with

Domestic c-Si

PV cells &

Domestic

Wafers

PV module Cells

31.1

43.9

38.5

52.1

Frame/Backrail

4.9

4.0

6.1

4.8

Front Glass

4.9

4.0

6.1

4.7

Encapsulant

3.1

2.5

3.9

3.0

Backsheet/Backglass 3.1

2.5

3.9

3.0

Junction Box

0.8

0.6

1.0

0.8

Edge Seals

0.2

0.2

0.3

0.2

Pottants

0.2

0.2

0.3

0.2

Bus Ribbons

1.2

1.0

1.5

1.2

Bypass Diodes

0.3

0.3

0.4

0.3

Production

5.88

4.78

7.28

5.68

Inverter9

Printed Circuit Board

Assemblies (DC-DC)10 7.8

6.4

1.6

1.3

Printed Circuit Board

Assemblies (DC-AC)

10

11.8

9.5

2.4

1.9

Thermal Management

System

-

-

0.5

0.4

Enclosure

4.3

3.5

1.3

1.0

Production

8

Edge Seals

0.2

0.2

0.3

0.2

Pottants

0.2

0.2

0.3

0.2

Bus Ribbons

1.2

1.0

1.5

1.2

Bypass Diodes

0.3

0.3

0.4

0.3

Production

5.88

4.78

7.28

5.68

Inverter9

Printed Circuit Board

Assemblies (DC-DC)10 7.8

6.4

1.6

1.3

Printed Circuit Board

Assemblies (DC-AC)

10

11.8

9.5

2.4

1.9

Thermal Management

System

-

-

0.5

0.4

Enclosure

4.3

3.5

1.3

1.0

Production

0.98

0.78

0.58

0.48

Non-Steel

Roof

Racking

Structural Fasteners

3.5

2.9

4.4

3.4

Rails

15.0

12.2

18.7

14.6

Production

1.18

0.98

1.48

1.18

Total

-

100

100

100

100

.07 Definitions.

(1) Actuator. Actuator means the component that produces the force, torque, and

displacement.

8 Consistent with Notice 2023-38, the direct cost of producing a Manufactured Product counts toward the

Domestic Cost Percentage only if all its Manufactured Product Components are domestically produced.

9 For purposes of this table, module-level power electronics inverter systems, including either

microinverters or direct current (DC) optimizers, are considered an inverter product.

10 In instances in which a U.S. Component meets the criteria of more than one listed manufactured

product component, it can claim all relevant Updated Assigned Cost Percentages.

- 14 -

(2) Backrail. Backrail means the component that secures the module laminate to

its support structure. A Backrail can be used for the same purposes and in place of a

Frame.

(3) Backsheet/Backglass. Backsheet/Backglass means the sheet or piece of

glass on the back of solar modules that acts as an electric insulator and protects the

inner components of such module from the surrounding environment.

(4) Cells. Cells in a PV module means the smallest semiconductor element of a

solar module which performs the immediate conversion of light into electricity.

(5) Controller. Controller means the component that transmits operating

instructions to the actuator.

f solar modules that acts as an electric insulator and protects the

inner components of such module from the surrounding environment.

(4) Cells. Cells in a PV module means the smallest semiconductor element of a

solar module which performs the immediate conversion of light into electricity.

(5) Controller. Controller means the component that transmits operating

instructions to the actuator.

(6) Crystalline silicon cells. Crystalline silicon cells, also referred to as c-Si cells,

means a cell in a PV module, as defined in section 5.05(4) of this notice, that is made of

silicon atoms connected to form a lattice.

(7) Drive system. Drive system means the components that transmit force,

torque, or displacement from the actuator to the torque tube.

(8) Electrical parts. Electrical parts mean the components consisting of only

control transformers, capacitors, inductors, bus/cables, and circuit protection not on

printed circuit board (PCB) assemblies.

(9) Encapsulant. Encapsulant means the material used to adhere the cell strings

between the front and rear glass (or backsheet) for the purpose of protecting against

environmental stress.

(10) Enclosure: Enclosure means the protective structure that houses, that is,

encloses, the other inverter components.

- 15 -

(11) Frame. Frame means the component that secures the module laminate to its

support structure.

(12) Front glass: Front glass means the transparent, protective, structural front

layer of a PV module.

(13) Ground-mounted PV (fixed-tilt). Ground-mount PV (fixed-tilt) refers to an

energy system using photovoltaic solar modules to generate electricity, mounted to a

non-building structure, including canopy steel racking structures, or floating on a body of

water, where the PV modules are mounted at a fixed angle and orientation.

transparent, protective, structural front

layer of a PV module.

(13) Ground-mounted PV (fixed-tilt). Ground-mount PV (fixed-tilt) refers to an

energy system using photovoltaic solar modules to generate electricity, mounted to a

non-building structure, including canopy steel racking structures, or floating on a body of

water, where the PV modules are mounted at a fixed angle and orientation.

(14) Ground-mounted PV (tracker). Ground-mount PV (tracker) refers to an

energy system using photovoltaic solar modules to generate electricity, mounted to a

non-building structure, or floating on a body of water, which integrates a solar tracker to

rotate the solar modules.

(15) Junction box. Junction box means the component that connects PV cell

strings and keeps power flowing in one direction.

(16) Printed circuit board assemblies. Printed circuit board assemblies means

finished, fully functional printed circuit boards that have all necessary subcomponents

soldered and installed on to them.

(17) Rails. Rails, including the components known as purlins, means the

components that attach modules to torque tubes.

(18) Rooftop PV (MLPE). Rooftop PV (MLPE) refers to an energy system using

photovoltaic solar modules to generate electricity, mounted to a building structure, which

integrates one or more microinverters or uses a DC-optimized inverter system such that

the rooftop PV system (with its microinverter(s) or DC-optimized inverter system)

- 16 -

regulates the DC electricity from each of its modules independently before that

electricity is converted into alternating current electricity.

(19) Rooftop PV (string inverter). Rooftop PV (string inverter) refers to an energy

system using photovoltaic solar modules to generate electricity, mounted to a building

structure, which integrates one or more inverters to convert direct current electricity from

a string of solar panels into alternating current electricity.

(20) Skid. Skid means that component upon which the enclosure sits.

(19) Rooftop PV (string inverter). Rooftop PV (string inverter) refers to an energy

system using photovoltaic solar modules to generate electricity, mounted to a building

structure, which integrates one or more inverters to convert direct current electricity from

a string of solar panels into alternating current electricity.

(20) Skid. Skid means that component upon which the enclosure sits.

(21) Structural Fasteners. Structural Fasteners for use in ground-mount PV

applications means a component that is used to connect the mechanical and drive

system components of a solar tracker to the foundation of the solar tracker, to connect

torque tubes to drive assemblies, or to connect segments of torque tubes to one

another. Structural Fasteners for use in rooftop PV applications means a component

that connects the rails, modules, and MLPE (if applicable) to one another.

(22) Thermal management system. Thermal management system means the

system consisting of the heat sinks, heat pipes, fans and/or the liquid cooling systems.

(23) Torque tubes. For purposes of the Manufactured Product Components

provided within the table under section 5.05 of this notice, Torque tubes means a

structural support element, including longitudinal purlins that: (i) is part of a solar

tracker; (ii) is of any cross-sectional shape; (iii) may be assembled from individually

manufactured segments; (iv) spans longitudinally between foundation posts; (v)

supports solar panels and is connected to a mounting attachment for solar panels (with

or without separate module interface rails); (vi) and is rotated by means of a drive

system.

- 17 -

l purlins that: (i) is part of a solar

tracker; (ii) is of any cross-sectional shape; (iii) may be assembled from individually

manufactured segments; (iv) spans longitudinally between foundation posts; (v)

supports solar panels and is connected to a mounting attachment for solar panels (with

or without separate module interface rails); (vi) and is rotated by means of a drive

system.

- 17 -

(24) Wafer. Wafer means a thin slice, sheet or layer of crystalline silicon

semiconductor material that comprises the substrate or absorber layer of one or more

photovoltaic cells. It is manufactured by forming an ingot from molten polysilicon and

then slicing it into wafers, or by depositing a thin-film semiconductor photon absorber

into a sheet or layer, that is, a thin-film deposition.

SECTION 6. MODIFICATIONS TO TABLE 1 FOR LAND-BASED WIND

.01 Modifications to Table 1 for Land-Based Wind. The First Updated Elective

Safe Harbor modifies Table 1 for Land-based Wind of section 4.04(2) of Notice 2024-41

by renaming “Steel or iron rebar in foundation,” the Applicable Project Component for

wind turbine foundation steel, to “Steel or iron reinforcing products in foundation,” and

further renaming “Material,” the Manufactured Product Component for wind tower

flanges, to “Preform.” This first modification is made to better reflect the Applicable

Project Component’s function and to clarify that non-rebar steel or iron reinforcement is

also covered. The second modification is made to better reflect the manufacturing

process and supply chain.

.02 Updated Table for Land-Based Wind.

APC

MPC

Value

Wind Turbine

Blades

31.2

Rotor Hub

9.9

Nacelle

47.5

Power Converter

8.9

Production

0.911

Wind Tower Flanges

Preform12

0.8

Production

0.811

11 Consistent with Notice 2023-38, the direct cost of producing a Manufactured Product counts toward the

Domestic Cost Percentage only if all its Manufactured Product Components are domestically produced

Land-Based Wind.

APC

MPC

Value

Wind Turbine

Blades

31.2

Rotor Hub

9.9

Nacelle

47.5

Power Converter

8.9

Production

0.911

Wind Tower Flanges

Preform12

0.8

Production

0.811

11 Consistent with Notice 2023-38, the direct cost of producing a Manufactured Product counts toward the

Domestic Cost Percentage only if all its Manufactured Product Components are domestically produced.

12 Flanges are typically made from single pieces of steel bar or pre-formed steel ingot; therefore the only

component of a flange would be the preform.

- 18 -

Tower

-

Steel/Iron Product

Steel or iron reinforcing

products in foundation

-

Steel/Iron Product

Total

-

100

.03 Definitions.

(1) Blades. Blades means the airfoil-shaped blade that is responsible for

converting wind energy to low-speed rotational energy.

(2) Land-based wind. Land-based wind means an energy system using wind

turbines to generate electricity on land.

(3) Nacelle. Nacelle means the assembly of the drivetrain and other tower-top

parts of a wind turbine (with the exception of the blades, rotor hub, and power converter,

if located atop the tower) within their cover housing.

(4) Power converter. Power converter means the component that translates the

electrical energy generated by the generator within the nacelle into a frequency and

voltage compatible with use or export to the grid.

(5) Preform. Preform means the rough-formed forged metal component from

which a wind tower flange is rolled and machined.

r,

if located atop the tower) within their cover housing.

(4) Power converter. Power converter means the component that translates the

electrical energy generated by the generator within the nacelle into a frequency and

voltage compatible with use or export to the grid.

(5) Preform. Preform means the rough-formed forged metal component from

which a wind tower flange is rolled and machined.

(6) Rotor hub. Rotor hub means the component to which the blades of a wind

turbine are attached, which controls the pitch angle of the blades with respect to the

wind and is connected to and transfers its rotation to the drivetrain within the nacelle.

SECTION 7. MODIFICATIONS TO TABLE 1 FOR BATTERY ENERGY STORAGE

SYSTEMS

.01 Modifications to Table 1 for Battery Energy Storage Systems (BESS).

- 19 -

The First Updated Elective Safe Harbor modifies Table 1 for BESS in section

4.04(3) of Notice 2024-41 by providing the Updated Assigned Cost Percentages for

BESS, which DOE sourced from its new BESS component costs for 2024. DOE

derived the Updated Assigned Cost Percentages for BESS from cost data from a variety

of sources, including datasets of system characteristics, price indices, U.S. survey data

from the government (for example, the U.S. Bureau of Labor Statistics, Department of

Labor) and private sector, public filings from corporations, and comprehensive

interviews of manufacturers, installers, developers, and owners of the representative

technologies. In addition, DOE used data collected from three different national

laboratories to generate the Updated Assigned Cost Percentages for BESS, rather than

a single national laboratory survey that DOE relied upon for the methodology it used to

generate the Assigned Cost Percentages in Table 1. The Updated Assigned Cost

Percentages for BESS more closely reflect the direct cost methodology outlined in

Notice 2023-38

ed data collected from three different national

laboratories to generate the Updated Assigned Cost Percentages for BESS, rather than

a single national laboratory survey that DOE relied upon for the methodology it used to

generate the Assigned Cost Percentages in Table 1. The Updated Assigned Cost

Percentages for BESS more closely reflect the direct cost methodology outlined in

Notice 2023-38.

The First Updated Elective Safe Harbor further modifies the BESS table from

Table 1 by: (i) renaming the following Applicable Project Components: (1) “Battery Pack”

to “Battery Pack/Module,” (2) “Inverter” to “Inverter/Converter,” and (3) “Steel or iron

rebar in foundation” to “Steel or iron reinforcing product foundation”; (ii) renaming the

Manufactured Product Components “Enclosure,” within the Inverter/Converter row, to

“Enclosure & Skids,” and “Climate Control,” within the Inverter/Converter row, to

“Thermal Management System for Inverter”; (iii) recategorizing the following

Manufactured Product Components: (1) “Thermal Management System” and “Battery

Management System” are recategorized from the Applicable Project Component row of

- 20 -

“Battery Pack,” in Table 1, to the Applicable Project Component row of “Battery

Container/Housing”, and (2) “Battery Racks” and “Metal Enclosures” are recategorized

as “Enclosures” within the Applicable Project Component row of “Battery

Container/Housing”; and (iv) removing the cost values for “Electrical Parts and Thermal

Management System for Inverter” (within the Inverter/Converter Applicable Project

Component) from the Distributed BESS column and adding them to the Printed Circuit

Board Assemblies within the same column.

The modifications described above are made for purposes of the First Updated

Elective Safe Harbor to better represent the variety of the Manufactured Product

Components that are used for particular functions within Applicable Project

Components

verter Applicable Project

Component) from the Distributed BESS column and adding them to the Printed Circuit

Board Assemblies within the same column.

The modifications described above are made for purposes of the First Updated

Elective Safe Harbor to better represent the variety of the Manufactured Product

Components that are used for particular functions within Applicable Project

Components. Additionally, “Steel or iron reinforcing product foundation” is renamed to

better reflect its function, and to clarify that non-rebar steel and iron reinforcement are

also covered.

With respect to the Thermal Management Systems and Battery Management

Systems referenced above, the DOE has advised that most of these systems are

located in the container outside of the battery pack/module. For this reason, and

because DOE’s published cost analysis is based on extensive industry feedback,

updating the placement of these items within the tables provided in this notice more

accurately represents the Manufactured Product Components for Battery

Packs/Modules and for Battery Container/Housing. Updating the placement of these

items is also more consistent with the cost breakdown within DOE’s cost analysis. As

such, the reclassification further improves the accuracy of the associated cost

percentages provided in this notice.

- 21 -

.02 Updated Table for Battery Energy Storage System (BESS).

APC

MPC

Grid-scale

BESS

Distributed

BESS

Battery Pack/

Module

Cells

52.0

26.9

Packaging

5.6

13.4

Production

8.013

2.913

Inverter/

Converter

Printed Circuit Board

Assemblies

1.4

5.4

Thermal Management

System for Inverter

0.4

-

Electrical Parts

0.5

-

Enclosure & Skids

0.4

1.0

Production

1.913

4.313

Battery

Container/

Housing

Enclosure

14.8

22.8

Battery Management

System

7.4

10.1

Thermal Management

System for Battery

Container/Housing

5.6

10.1

Production

2.013

3.113

Steel or iron

reinforcing

products in

foundation

-

Steel/Iron

Product

-

Total

-

100

100

.0

stem for Inverter

0.4

-

Electrical Parts

0.5

-

Enclosure & Skids

0.4

1.0

Production

1.913

4.313

Battery

Container/

Housing

Enclosure

14.8

22.8

Battery Management

System

7.4

10.1

Thermal Management

System for Battery

Container/Housing

5.6

10.1

Production

2.013

3.113

Steel or iron

reinforcing

products in

foundation

-

Steel/Iron

Product

-

Total

-

100

100

.03 Definitions.

(1) Battery pack/module. Battery pack/module means the packaged unit of

battery cells that are configured electrically, in series or parallel, and is ready for

installation in the battery container/housing without an additional manufacturing

process.

13 Consistent with Notice 2023-38, the direct cost of producing a Manufactured Product counts toward the

Domestic Cost Percentage only if all its Manufactured Product Components are domestically produced.

- 22 -

(2) Inverter/converter. Inverter/converter means an end product that is suitable

to convert between direct current and alternating current or direct current and direct

current electricity to enable battery charge and discharge.

(3) Battery container/housing. Battery container/housing means a superstructure

that houses, protects, and manages a system of multiple battery packs/modules.

(4) Battery Management System. Battery Management System means a

combined system of electrical and electronic parts that serves to monitor (and may also

control) the condition of the battery pack/module.

(5) Cells. Cells in a battery pack means an electrochemical cell comprised of one

or more positive electrodes and one or more negative electrodes.

(6) Distributed BESS. Distributed BESS means an energy storage system for

electricity generation using battery cells and battery modules, which has a nameplate

capacity not greater than 1 megawatt-hour.

) the condition of the battery pack/module.

(5) Cells. Cells in a battery pack means an electrochemical cell comprised of one

or more positive electrodes and one or more negative electrodes.

(6) Distributed BESS. Distributed BESS means an energy storage system for

electricity generation using battery cells and battery modules, which has a nameplate

capacity not greater than 1 megawatt-hour.

(7) Electrical parts. Electrical parts mean the components consisting of only

control transformers, capacitors, inductors, bus/cables, and circuit protection not on

printed circuit board (PCB) assemblies.

(8) Enclosure. Enclosure means a structure that houses and protects other

equipment and may provide structural support to other products and components.

(9) Grid-scale BESS. Grid-scale BESS means an energy storage system for

electricity generation using battery cells and battery modules, which has a nameplate

capacity greater than 1 megawatt-hour.

(10) Packaging. Packaging means the materials that surround battery cells to

create a battery pack/module.

- 23 -

(11) Printed circuit board assemblies. Printed circuit board assemblies means

finished, fully functional printed circuit boards that have all necessary subcomponents

soldered and installed on to them.

(12) Thermal Management System for Inverter. Thermal management System for

Inverter means the primary cooling unit to optimize operation and safety, external to

and/or within the Inverter/Converter (in which it is a Manufactured Product Component

of the Inverter/Converter).

shed, fully functional printed circuit boards that have all necessary subcomponents

soldered and installed on to them.

(12) Thermal Management System for Inverter. Thermal management System for

Inverter means the primary cooling unit to optimize operation and safety, external to

and/or within the Inverter/Converter (in which it is a Manufactured Product Component

of the Inverter/Converter).

(13) Thermal Management System for Battery Container/Housing. Thermal

Management System for Battery Container/Housing means the primary cooling unit to

optimize operation and safety of the BESS (in which it is a Manufactured Product

Component of the Battery Container/Housing).

SECTION 8. CONDITIONS FOR USE OF THE FIRST UPDATED ELECTIVE SAFE

HARBOR

.01 In General. The First Updated Elective Safe Harbor applies to both the Steel

or Iron Requirement and the Manufactured Products Requirement of the Domestic

Content Requirement for each Applicable Project for which a taxpayer elects to have the

First Updated Elective Safe Harbor apply. Notice 2023-38 requires that costs that are

included in the numerator and denominator for purposes of calculating the Domestic

Cost Percentage are the direct materials and direct labor costs that are paid or incurred

by the manufacturer of the Manufactured Product. Taxpayers are further required to

calculate the direct costs of any U.S. Components that may have been incorporated into

Non-U.S. Manufactured Products. The Treasury Department and the IRS are aware

that obtaining a manufacturer’s direct costs of manufacturing may require the taxpayer

- 24 -

to gather cost data from multiple suppliers and manufacturers, including foreign

manufacturers, and may present challenges for substantiation and verification.

.02 First Updated Elective Safe Harbor

corporated into

Non-U.S. Manufactured Products. The Treasury Department and the IRS are aware

that obtaining a manufacturer’s direct costs of manufacturing may require the taxpayer

- 24 -

to gather cost data from multiple suppliers and manufacturers, including foreign

manufacturers, and may present challenges for substantiation and verification.

.02 First Updated Elective Safe Harbor. Unless otherwise provided in this notice,

a taxpayer electing to use the First Updated Elective Safe Harbor for an Applicable

Project must use the Applicable Project Components, the Manufactured Product

Components, and the Updated Assigned Cost Percentages listed in a table provided in

sections 5-7 of this notice as the exclusive and exhaustive set of Applicable Project

Components, Manufactured Product Components and Updated Assigned Cost

Percentages for purposes of determining compliance with the Domestic Content

Requirement for each Applicable Project for which the taxpayer makes this election. The

requirements in the previous sentence apply regardless of whether property listed in a

table provided in sections 5-7 of this notice is fully or fractionally owned or shared. The

classifications and cost percentages provided in a tables provided in sections 5-7 of this

notice will be accepted by the IRS for the identified Manufactured Products and

Manufactured Product Components for purposes of determining compliance with the

Steel or Iron Requirement and calculating the Domestic Cost Percentage if all other

requirements in this notice and Notice 2023-38 are met.

To be eligible for the First Updated Elective Safe Harbor, Applicable Projects are

not required to be made of all the Applicable Project Components provided in a table

provided in sections 5-7 of this notice, and each Applicable Project Component listed is

not required to be made of the full list of Manufactured Product Components provided in

a table provided in sections 5-7 of this notice

To be eligible for the First Updated Elective Safe Harbor, Applicable Projects are

not required to be made of all the Applicable Project Components provided in a table

provided in sections 5-7 of this notice, and each Applicable Project Component listed is

not required to be made of the full list of Manufactured Product Components provided in

a table provided in sections 5-7 of this notice. Taxpayers may still elect to use the First

Updated Elective Safe Harbor even if entries in a table of this notice are not used as

- 25 -

inputs to their Applicable Projects or Manufactured Products, or if the Applicable Project

contains additional inputs not listed in a table provided in sections 5-7 of this notice.

Any Applicable Project Component or Manufactured Product Component listed in

a table provided in sections 5-7 of this notice that is not used as an input to the

Applicable Project must be treated by the electing taxpayer as having a zero value in

calculating the Domestic Cost Percentage. An Applicable Project Component or

Manufactured Product Component contained in a taxpayer’s Applicable Project but not

listed in a table provided in sections 5-7 of this notice will not disqualify the taxpayer

from using the First Updated Elective Safe Harbor. However, such unlisted items may

not count toward satisfying the Adjusted Percentage Rule. The absence of a

Manufactured Product or Manufactured Product Component that is listed in a table

provided in sections 5-7 of this notice, or the presence of a Manufactured Product or

Manufactured Product Component that is not listed in sections a table provided in 5-7 of

this notice, in an Applicable Project does not affect the Assigned Cost Percentages

listed in sections 5-7 for purposes of the First Updated Elective Safe Harbor.

.03 First Updated Elective Safe Harbor Requirements.

provided in sections 5-7 of this notice, or the presence of a Manufactured Product or

Manufactured Product Component that is not listed in sections a table provided in 5-7 of

this notice, in an Applicable Project does not affect the Assigned Cost Percentages

listed in sections 5-7 for purposes of the First Updated Elective Safe Harbor.

.03 First Updated Elective Safe Harbor Requirements.

(1) In general. Unless otherwise provided, all other provisions of Notice 2023-38

apply in determining whether an Applicable Project meets the Domestic Content

Requirement. For example, the Applicable Project Components that are specified as

subject to the Steel or Iron Requirement in sections 5-7 of this notice must satisfy the

Steel or Iron Requirement described in section 3.02 of Notice 2023-38. See sections

8.03(8) and 10 of this notice for the First Updated Elective Safe Harbor’s election and

certification requirements.

- 26 -

(2) No Partial Safe Harbor Reliance. Taxpayers that elect to use the First

Updated Elective Safe Harbor must apply in its entirety the section of this notice that is

specific to the Applicable Project for which the taxpayer makes such election. For

example, if a taxpayer’s Applicable Project is a land-based wind facility, the taxpayer

must use the classifications for Applicable Project Components and Manufactured

Product Components in section 6.02 of this notice with respect to land-based wind and

must use the Updated Assigned Cost Percentages for all the Manufactured Products

and Manufactured Product Components (for example, Blades, Rotor Hub, Nacelle, and

Power Converter) provided in section 6.02 of this notice that are used in the taxpayer’s

Applicable Project without substitution.

nd Manufactured

Product Components in section 6.02 of this notice with respect to land-based wind and

must use the Updated Assigned Cost Percentages for all the Manufactured Products

and Manufactured Product Components (for example, Blades, Rotor Hub, Nacelle, and

Power Converter) provided in section 6.02 of this notice that are used in the taxpayer’s

Applicable Project without substitution.

(3) Determining Domestic Cost Percentage. To determine the Domestic Cost

Percentage using the First Updated Elective Safe Harbor, a taxpayer must refer to the

section of this notice that describes the taxpayer’s Applicable Project and add up the

Updated Assigned Cost Percentages for each listed U.S. Manufactured Product (as

defined in section 3.03(1) of Notice 2023-38) and U.S. Component (as described in

section 3.03(2)(b) of Notice 2023-38) of the taxpayer’s Applicable Project. This total

value is the Domestic Cost Percentage for purposes of the First Updated Elective Safe

Harbor. Any Manufactured Product or Manufactured Product Component listed in a

table provided in sections 5-7 of this notice that is not a part of the taxpayer’s Applicable

Project must take a zero value for the Updated Assigned Cost Percentage under the

First Updated Elective Safe Harbor for such Manufactured Product or Manufactured

Product Component, with all Updated Assigned Cost Percentages shown in sections 5-

7 of this notice remaining unchanged. Any Manufactured Product or Manufactured

- 27 -

Product Component not listed in a table provided in sections 5-7 of this notice must be

disregarded for purposes of determining the Domestic Cost Percentage using the First

Updated Elective Safe Harbor.

t or Manufactured

Product Component, with all Updated Assigned Cost Percentages shown in sections 5-

7 of this notice remaining unchanged. Any Manufactured Product or Manufactured

- 27 -

Product Component not listed in a table provided in sections 5-7 of this notice must be

disregarded for purposes of determining the Domestic Cost Percentage using the First

Updated Elective Safe Harbor.

(4) Solar PV systems with Domestic C-Si PV Cells and Domestic Wafers.

Taxpayers with ground-mount (tracking), ground-mount (fixed), rooftop (MLPE), or

rooftop (string) solar PV systems may elect to use the associated cost percentages for

ground-mount (tracking) with domestic c-Si PV cells and domestic wafers, ground-

mount (fixed) with domestic c-Si PV cells and domestic wafers, rooftop (MLPE) with

domestic c-Si PV cells and domestic wafers, or rooftop (string) with domestic c-Si PV

cells and domestic wafers if all, or a portion of, the PV modules in the Applicable Project

use domestically manufactured c-Si PV cells that exclusively use domestically

manufactured wafers, as the terms are defined in section 5.07 of this notice and subject

to the guidance in section 8.03(5) of this notice below.

(5) Foreign- and Domestic-Sourced Manufactured Products and/or Manufactured

Product Components. Taxpayers who source the same type of Manufactured Product

or Manufactured Product Component (that is, they are listed in the same row of a

particular table in sections 5-7 of this notice) from both foreign and domestic sources

(Mixed Source Item or MSI) in a particular Applicable Project described in sections 5-7

of this notice may use the First Updated Elective Safe Harbor to determine a single

Updated Assigned Cost Percentage for each separate type of Mixed Source Item in the

Applicable Project

are listed in the same row of a

particular table in sections 5-7 of this notice) from both foreign and domestic sources

(Mixed Source Item or MSI) in a particular Applicable Project described in sections 5-7

of this notice may use the First Updated Elective Safe Harbor to determine a single

Updated Assigned Cost Percentage for each separate type of Mixed Source Item in the

Applicable Project.

Taxpayers that elect to use the associated cost percentages for solar PV with

domestic c-Si PV cells and domestic wafers where only a portion of the Applicable

- 28 -

Project’s PV cells are domestic c-Si PV cells that exclusively use domestically

manufactured wafers must treat any domestically manufactured PV cells that do not

exclusively use domestic wafers as though such PV cells are foreign sourced for

purposes of using the cost percentages in this notice, and may not include the

“Production” cost percentage for PV modules containing such cells that otherwise meet

the definition of a U.S. Manufactured Product in section 3.03(2) of Notice 2023-38.

Furthermore, taxpayers that elect to use the associated cost percentages for ground-

mount (tracking) with domestic c-Si PV cells and domestic wafers, ground-mount (fixed)

with domestic c-Si PV cells and domestic wafers, rooftop (MLPE) with domestic c-Si PV

cells and domestic wafers, or rooftop (string) with domestic c-Si PV cells and domestic

wafers must use the corresponding Updated Assigned Cost Percentages for all the

Manufactured Products and Manufactured Product Components in the Applicable

Project for purposes of determining the Domestic Cost Percentage.

For Mixed Source Items (MSI), that have a nameplate capacity, the following

weighted average formula may be used to determine the Updated Assigned Cost

Percentage attributable to each type of Mixed Source Item:

DCPDomestic MSI x Nameplate CapacityDomestic MSI

Nameplate Capacity MSI

For purposes of this formula:

pplicable

Project for purposes of determining the Domestic Cost Percentage.

For Mixed Source Items (MSI), that have a nameplate capacity, the following

weighted average formula may be used to determine the Updated Assigned Cost

Percentage attributable to each type of Mixed Source Item:

DCPDomestic MSI x Nameplate CapacityDomestic MSI

Nameplate Capacity MSI

For purposes of this formula:

(a) DCPDomestic MSI means the Updated Assigned Cost Percentage derived from

the tables in this notice of the Mixed Source Item.

- 29 -

(b) Nameplate CapacityDomesticMSI means the nameplate capacity of the Mixed

Source Items of the same type in the Applicable Project that is produced in the United

States.

(c) Nameplate CapacityMSI means the total nameplate capacity of the Mixed

Source Items of the same type in the Applicable Project.

For Mixed Source Items without nameplate capacities, the portion of cost

percentage provided in sections 5-7 of this notice that may count toward the Domestic

Cost Percentage must be calculated by using the weighted average formula described

above, modified by replacing the nameplate capacity of the Mixed Source Items with the

nameplate capacities of the associated Applicable Project Components with which the

Mixed Source Item is directly integrated. For this purpose, Mixed Source Items without

nameplate capacities must apply: the total nameplate capacity of the associated PV

module(s) for the Solar PV Table; the total nameplate capacity of the associated wind

turbine for land-based wind; or the total nameplate capacity of the battery pack(s) for

BESS. If a type of Mixed Source Item without nameplate capacity has multiple units

that are both foreign- and domestic-sourced associated and directly integrated with the

same Applicable Project Component with nameplate capacity, then all such Mixed

Source Items must be treated as foreign-sourced.

wind

turbine for land-based wind; or the total nameplate capacity of the battery pack(s) for

BESS. If a type of Mixed Source Item without nameplate capacity has multiple units

that are both foreign- and domestic-sourced associated and directly integrated with the

same Applicable Project Component with nameplate capacity, then all such Mixed

Source Items must be treated as foreign-sourced.

(6) Production Costs. The tables in sections 5-7 of this notice contain a line item

for “Production,” which, although listed under the column for Manufactured Product

Components, is not a Manufactured Product Component. With the exception noted in

section 8.03(5) of this notice, above, “Production” refers to the production cost of the

relevant Manufactured Product and can be included in the total Domestic Cost

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Percentage only if all the Manufactured Product Components of a Manufactured

Product are domestically produced. See Notice 2023-38, section 3.03(2). The Updated

Assigned Cost Percentage attributable to production costs for a particular Manufactured

Product may be used if such Manufactured Product contains Manufactured Product

Components not listed in a table provided in sections 5-7 of this notice or if entries in a

table provided in sections 5-7 of this notice are not a part of such Manufactured

Product, so long as the remainder of the Manufactured Product Components in sections

5-7 that are a part of such Manufactured Product are mined, produced, or manufactured

in the United States.

tains Manufactured Product

Components not listed in a table provided in sections 5-7 of this notice or if entries in a

table provided in sections 5-7 of this notice are not a part of such Manufactured

Product, so long as the remainder of the Manufactured Product Components in sections

5-7 that are a part of such Manufactured Product are mined, produced, or manufactured

in the United States.

(7) Exclusive Safe Harbor. A taxpayer that elects to use the First Updated

Elective Safe Harbor with respect to an Applicable Project must consider the steel or

iron products, Manufactured Products, and Manufactured Product Components that are

identified in a table provided in sections 5-7 of this notice as an exclusive and

exhaustive set of steel or iron products, Manufactured Products, and Manufactured

Product Components for purposes of determining compliance with the Domestic

Content Requirement for that Applicable Project. The First Updated Elective Safe

Harbor may still be used in instances in which a taxpayer’s Applicable Project does not

contain every item identified in a table in sections 5-7 of this notice, or in which a

taxpayer’s Applicable Project contains additional items not identified in a table provided

in sections 5-7 of this notice, provided the taxpayer applies the requirements for

determining Domestic Cost Percentage described in section 8.03(3)-(7) of this notice.

(8) Certification. Taxpayers must affirmatively elect to rely on the First Updated

Elective Safe Harbor in sections 5-7 of this notice and must notify the IRS of this

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election by providing information on the Domestic Content Certification Statement as

described in section 10 of this notice.

.04 Examples

(1) Example 1.

centage described in section 8.03(3)-(7) of this notice.

(8) Certification. Taxpayers must affirmatively elect to rely on the First Updated

Elective Safe Harbor in sections 5-7 of this notice and must notify the IRS of this

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election by providing information on the Domestic Content Certification Statement as

described in section 10 of this notice.

.04 Examples

(1) Example 1.

(a) In its taxable year beginning in June 2025, Taxpayer purchases a 100-

megawatt direct current (MWdc) ground-mounted PV (tracker) (Applicable Project A)

from Contractor under an EPC contract, places the project in service, and makes a valid

election to use the First Updated Elective Safe Harbor to qualify for the domestic

content bonus credit amount under § 48. Applicable Project A is an energy project for

purposes of § 48 that is comprised of five categories of Applicable Project Components

identified in the table in section 5.05 in this notice for a ground-mounted PV (tracker):

PV modules, inverters, PV trackers, steel piles, and steel reinforcing products in

foundation. For purposes of the Adjusted Percentage Rule, the adjusted percentage is

40 percent for energy projects that are not offshore wind facilities. See § 48(a)(12)(B).

(b) In accordance with the table in section 5.05 of this notice, taxpayer identifies

the steel piles and steel reinforcing products in foundation as steel or iron products and

the PV modules, inverters, and PV trackers as Manufactured Products.

(c) All of the steel piles and steel reinforcing products in foundation are

manufactured in the United States and meet the Steel or Iron Requirement.

(b) In accordance with the table in section 5.05 of this notice, taxpayer identifies

the steel piles and steel reinforcing products in foundation as steel or iron products and

the PV modules, inverters, and PV trackers as Manufactured Products.

(c) All of the steel piles and steel reinforcing products in foundation are

manufactured in the United States and meet the Steel or Iron Requirement.

(d) Two sets of PV modules are used in the Applicable Project A. One set has a

capacity of 60 MWdc and are PV modules manufactured in the United States that

incorporate c-Si PV cells and wafers that are manufactured in the United States, with

the modules’ remaining Manufactured Product Components, as identified in accordance

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with the table in section 5.05 of this notice, also manufactured in the United States. The

remaining set has a capacity of 40 MWdc and are PV modules that are not

manufactured in the United States and that have no U.S. Components. None of

Applicable Project A’s PV inverters are manufactured in the United States or have any

U.S. Components.

(e) The PV trackers used in Applicable Project A are manufactured in the United

States and have seven categories of Manufactured Product Components (torque tubes,

structural fasteners, drive system, dampers, actuator, controllers, and rails) of which a

portion of the torque tubes are manufactured in the United States. The PV trackers are

associated and directly integrated with all the PV modules used in Applicable Project A.

The torque tubes manufactured in the United States are the only torque tubes

associated and directly integrated with 80 MWdc of Applicable Project A’s PV modules.

The remainder of torque tubes and other PV tracker components are not manufactured

in the United States. The PV trackers are Non-U.S. Manufactured Products because

some of their Manufactured Product Components are not produced in the United States.

ufactured in the United States are the only torque tubes

associated and directly integrated with 80 MWdc of Applicable Project A’s PV modules.

The remainder of torque tubes and other PV tracker components are not manufactured

in the United States. The PV trackers are Non-U.S. Manufactured Products because

some of their Manufactured Product Components are not produced in the United States.

(f) Applicable Project A’s steel or iron products identified in the table in section

5.05 of this notice meet the Steel or Iron Requirement. The Taxpayer makes a valid

election to use the associated cost percentages for ground-mount (tracking) with

domestic c-Si PV cells & domestic wafers. The Taxpayer is able to do so because a

portion of the PV modules in the Applicable Project use domestically manufactured

crystalline silicon cells that exclusively use domestically manufactured wafers. The

table in section 5.05 of this notice identifies the torque tube Manufactured Product

Component of a PV tracker of a PV system as constituting 8.6% of the total cost of

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Manufactured Products for this type of Applicable Project. The table in section 5.05 of

this notice identifies the Manufactured Product Components of a PV module as

constituting 69.7% (51.6% + 4.7% + 4.7% + 3.0% + 3.0% + 0.8% + 0.2% + 0.2% + 1.2%

+ 0.3%) of the total cost of Manufactured Products for an Applicable Project that is a

ground-mounted PV (tracker) with domestic c-Si PV cells & domestic wafers. In

addition to these costs, the table in section 5.05 of this notice provides that the cost to

produce PV modules for such an Applicable Project constitutes 3.7% of the total cost of

Manufactured Products for such an Applicable Project

0.3%) of the total cost of Manufactured Products for an Applicable Project that is a

ground-mounted PV (tracker) with domestic c-Si PV cells & domestic wafers. In

addition to these costs, the table in section 5.05 of this notice provides that the cost to

produce PV modules for such an Applicable Project constitutes 3.7% of the total cost of

Manufactured Products for such an Applicable Project. Based on a nameplate capacity

weighted average of Applicable Project Component categories and Manufactured

Product Component categories identified in the table in section 5.05 of this notice, the

total Updated Assigned Cost Percentage attributable to the PV modules of Applicable

Project A would be calculated as: (69.7% + 3.7%) x 60 / 100 = 44.0%. Based on a

nameplate capacity weighted average (using the capacities of the Applicable Project

Components associated with the torque tubes),the Updated Assigned Cost Percentage

attributable to the torque tubes of Applicable Project A would be calculated as: 8.6% x

80 / 100 = 6.9%. Applicable Project A’s overall Domestic Cost Percentage is: 44.0% +

6.9% = 50.9%. Applicable Project A satisfies the Adjusted Percentage Rule because its

Domestic Cost Percentage of 50.9% exceeds the adjusted percentage that applies to

Applicable Project A (40%).

(2) Example 2.

(a) Assume the same facts as in Example 1, except that the second set of PV

modules used in Applicable Project A, with a capacity of 40 MWdc, are manufactured in

the United States with domestically produced PV cells using foreign wafers though none

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of those modules’ other components are produced in the United States. The taxpayer

makes a valid election to use the associated cost percentages for ground-mount

(tracking) with domestic c-Si PV cells & domestic wafers. The Taxpayer is able to do so

because a portion of the PV modules in Applicable Project A use domestically

manufactured c-Si cells that exclusively use domestically manufactured wafers

odules’ other components are produced in the United States. The taxpayer

makes a valid election to use the associated cost percentages for ground-mount

(tracking) with domestic c-Si PV cells & domestic wafers. The Taxpayer is able to do so

because a portion of the PV modules in Applicable Project A use domestically

manufactured c-Si cells that exclusively use domestically manufactured wafers.

Consistent with section 8.03(5) of this notice, the 40 MW of PV modules using foreign

wafers must be treated as having foreign cells and the PV modules also are Non-U.S.

Manufactured Products. In this case, the Domestic Cost Percentage would be the

same as in Example 1, or 50.9%, even though the second set of PV modules are

manufactured in the United States and contain domestically produced PV cells. When a

taxpayer elects to use the associated cost percentages for PV systems with domestic c-

Si cells and domestic wafers it must treat any domestically-produced PV cells that do

not exclusively use domestic wafers as not being U.S. Components, and hence must

treat the modules in which those cells are used as Non-U.S. Manufactured Products for

purposes of using such cost percentages.

(3) Example 3.

(a) Assume the same facts as in Example 2, except that the taxpayer does not

elect to use the associated cost percentages for ground-mount (tracking) with domestic

c-Si PV cells & domestic wafers.

(b) Applicable Project A’s steel or iron products identified in the table in section

5.05 of this notice meet the Steel or Iron Requirement. The table in section 5.05 of this

notice identifies the torque tube Manufactured Product Component of a PV tracker of a

- 35 -

PV system that does not contain domestic c-Si cells and wafers as constituting 11.0% of

the total cost of Manufactured Products for this type of Applicable Project

products identified in the table in section

5.05 of this notice meet the Steel or Iron Requirement. The table in section 5.05 of this

notice identifies the torque tube Manufactured Product Component of a PV tracker of a

- 35 -

PV system that does not contain domestic c-Si cells and wafers as constituting 11.0% of

the total cost of Manufactured Products for this type of Applicable Project.

The table in section 5.05 of this notice identifies the Manufactured Product

Components of a PV module as constituting 61.1% (38.0% + 6.0% + 6.0% + 3.8% +

3.8% + 1.0% + 0.3% + 0.3% + 1.5% + 0.4%) of the total cost of Manufactured Products

for an Applicable Project that is a ground-mounted PV (tracker). In addition to these

costs, the table in section 5.05 of this notice provides that the cost to produce PV

modules for such an Applicable Project constitutes 4.7% of the total cost of

Manufactured Products for such an Applicable Project. Based on a nameplate capacity

weighted average of Applicable Project Component categories and Manufactured

Product Component categories identified in the table in section 5.05 of this notice, the

total Updated Assigned Cost Percentage attributable to the first set of PV modules of

Applicable Project A would be calculated as: (61.1% + 4.7%) x 60 / 100 = 39.5%.

Based on a nameplate capacity weighted average of Applicable Project Component

categories and Manufactured Product Component categories identified in the table in

section 5.05 of this notice, the total Updated Assigned Cost Percentage attributable to

the second set of PV modules of Applicable Project A would be calculated as: (38.0%) x

40 / 100 = 15.2%. Based on a nameplate capacity weighted average (using the

capacities of the Applicable Project Components associated with the torque tubes), the

Updated Assigned Cost Percentage attributable to the torque tubes of Applicable

Project A would be calculated as: 11.0% x 80 / 100 = 8.8%

ble to

the second set of PV modules of Applicable Project A would be calculated as: (38.0%) x

40 / 100 = 15.2%. Based on a nameplate capacity weighted average (using the

capacities of the Applicable Project Components associated with the torque tubes), the

Updated Assigned Cost Percentage attributable to the torque tubes of Applicable

Project A would be calculated as: 11.0% x 80 / 100 = 8.8%. Applicable Project A’s

overall Domestic Cost Percentage is: 39.5% + 15.2% + 8.8% = 63.5%. Applicable

- 36 -

Project A satisfies the Adjusted Percentage Rule because its Domestic Cost Percentage

of 63.5% exceeds the adjusted percentage that applies to Applicable Project A (40%).

(4) Example 4.

(a) In its taxable year beginning June 2025, Taxpayer purchases a 100-megawatt

direct current (MWdc) ground-mounted PV (tracker) (Applicable Project B) from

Contractor under an EPC contract, places the project in service, and makes a valid

election to use the First Updated Elective Safe Harbor to qualify for the domestic

content bonus credit amount under § 48. Applicable Project B is an energy project for

purposes of § 48 that is comprised of five categories of Applicable Project Components

identified in the table in section 5.05 in this notice for a ground-mounted PV (tracker):

PV modules, inverters, PV trackers, steel piles, and steel reinforcing products in

foundation. For purposes of the Adjusted Percentage Rule, the adjusted percentage is

40 percent for energy projects that are not offshore wind facilities. See § 48(a)(12)(B).

(b) In accordance with the table in section 5.05 of this notice, taxpayer identifies

the steel piles and steel reinforcing products in foundation as steel or iron products and

the PV modules, inverters, and PV trackers as Manufactured Products.

(c) All of the steel piles and steel reinforcing products in foundation are

manufactured in the United States and meet the Steel or Iron Requirement.

(b) In accordance with the table in section 5.05 of this notice, taxpayer identifies

the steel piles and steel reinforcing products in foundation as steel or iron products and

the PV modules, inverters, and PV trackers as Manufactured Products.

(c) All of the steel piles and steel reinforcing products in foundation are

manufactured in the United States and meet the Steel or Iron Requirement.

(d) Two sets of PV modules are used in the Applicable Project B. One set has a

capacity of 60 MWdc and are PV modules manufactured in the United States that

incorporate c-Si PV cells and wafers that are manufactured in the United States, with

the modules’ remaining Manufactured Product Components, as identified in accordance

with the table in section 5.05 of this notice, also manufactured in the United States. The

- 37 -

remaining set, with a capacity of 40 MWdc, is manufactured in the United States with

domestically produced PV cells using foreign wafers and domestically produced front

glass. None of the remaining set of modules’ other Manufactured Product Components

are produced in the United States. None of Applicable Project B’s PV inverters are

manufactured in the United States or have any U.S. Components.

(e) The PV trackers used in Applicable Project B are manufactured in the United

States and have seven categories of Manufactured Product Components (torque tubes,

structural fasteners, drive system, dampers, actuator, controllers, and rails) of which a

portion of the torque tubes are manufactured in the United States. The PV trackers are

associated and directly integrated with all the PV modules used in Applicable Project B.

The torque tubes manufactured in the United States are the only torque tubes

associated and directly integrated with 80 MWdc of Applicable Project B’s PV modules.

The remainder of torque tubes and other PV tracker components are not manufactured

in the United States. The PV trackers are Non-U.S

ers are

associated and directly integrated with all the PV modules used in Applicable Project B.

The torque tubes manufactured in the United States are the only torque tubes

associated and directly integrated with 80 MWdc of Applicable Project B’s PV modules.

The remainder of torque tubes and other PV tracker components are not manufactured

in the United States. The PV trackers are Non-U.S. Manufactured Products because

some of their Manufactured Product Components are not produced in the United States.

(f) Applicable Project B’s steel or iron products identified in the table in section

5.05 of this notice meet the Steel or Iron Requirement. The Taxpayer makes a valid

election to use the associated cost percentages for ground-mount (tracking) with

domestic c-Si PV cells & domestic wafers. The Taxpayer is able to do so because a

portion of the PV modules in the Applicable Project use domestically manufactured

crystalline silicon cells that exclusively use domestically manufactured wafers. The

table in section 5.05 of this notice identifies the torque tube Manufactured Product

Component of a PV tracker of a PV system as constituting 8.6% of the total cost of

- 38 -

Manufactured Products for this type of Applicable Project. The table in section 5.05 of

this notice identifies the Manufactured Product Components of a PV module as

constituting 69.7% (51.6% + 4.7% + 4.7% + 3.0% + 3.0% + 0.8% + 0.2% + 0.2% + 1.2%

+0.3%) of the total cost of Manufactured Products for an Applicable Project that is a

ground-mounted PV (tracker) with domestic c-Si PV cells & domestic wafers, of which

front glass accounts for 4.7 percentage points. In addition to these costs, the table in

section 5.05 of this notice provides that the cost to produce PV modules for such an

Applicable Project constitutes 3.7% of the total cost of Manufactured Products for such

an Applicable Project

plicable Project that is a

ground-mounted PV (tracker) with domestic c-Si PV cells & domestic wafers, of which

front glass accounts for 4.7 percentage points. In addition to these costs, the table in

section 5.05 of this notice provides that the cost to produce PV modules for such an

Applicable Project constitutes 3.7% of the total cost of Manufactured Products for such

an Applicable Project.

Based on a nameplate capacity weighted average of Applicable Project

Component categories and Manufactured Product Component categories identified in

the table in section 5.05 of this notice, the total Updated Assigned Cost Percentage

attributable to the PV modules of Applicable Project B would be calculated as: [(69.7% +

3.7%) x 60 / 100] + [(4.7%) x 40 / 100] = 45.9%. Based on a nameplate capacity

weighted average (using the capacities of the Applicable Project Components

associated with torque tubes), the Updated Assigned Cost Percentage attributable to

the torque tubes of Applicable Project B would be calculated as: 8.6% x 80 / 100 =

6.9%. Applicable Project B’s overall Domestic Cost Percentage is: 45.9% + 6.9% =

52.8%. Applicable Project B satisfies the Adjusted Percentage Rule because its

Domestic Cost Percentage of 52.8% exceeds the adjusted percentage that applies to

Applicable Project B (40%).

SECTION 9. CERTIFICATION

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An Applicable Project is eligible for a domestic content bonus credit amount if the

Applicable Project satisfies the Domestic Content Requirement and the taxpayer timely

submits to the IRS the certification described in section 5 of Notice 2023-38. To

affirmatively elect to rely on the New Elective Safe Harbor, a taxpayer must provide on

the Domestic Content Certification Statement described in section 5.01(2)(c) of Notice

2023-38 a statement that the taxpayer is relying on the First Updated Elective Safe

Harbor

ic Content Requirement and the taxpayer timely

submits to the IRS the certification described in section 5 of Notice 2023-38. To

affirmatively elect to rely on the New Elective Safe Harbor, a taxpayer must provide on

the Domestic Content Certification Statement described in section 5.01(2)(c) of Notice

2023-38 a statement that the taxpayer is relying on the First Updated Elective Safe

Harbor. As provided in section 5.01(2)(b) of Notice 2023-38, the Domestic Content

Certification Statement must be attached to Form 8835, Renewable Electricity

Production Credit; Form 3468, Investment Credit; or other applicable form for reporting

domestic content bonus credit amounts under §§ 45, 45Y, 48, or 48E filed with the

taxpayer’s annual return submitted to the IRS for the first taxable year in which the

taxpayer reports a domestic content bonus credit amount for such Applicable Project.

SECTION 10. SUBSTANTIATION

A taxpayer reporting a domestic content bonus credit amount for meeting the

Domestic Content Requirement must meet the general recordkeeping requirements

under § 6001 to substantiate that the Domestic Content Requirement has been met.

Section 6001 provides that every person liable for any tax imposed by the Code, or for

the collection thereof, must keep such records as the Secretary of the Treasury or her

delegate may from time to time prescribe. Section 1.6001-1(a) provides that any person

subject to income tax must keep such permanent books of account or records as are

sufficient to establish the amount of gross income, deductions, credits, or other matters

required to be shown by such person in any return of such tax. Section 1.6001-1(e)

provides that the books and records required by § 1.6001-1 must be retained so long as

the contents thereof may become material in the administration of any internal revenue

- 40 -

law. See also §§ 45(b)(12), 48(a)(16), 48E(a)(3)(B) (by cross-reference to § 48(a)(12)),

and 45Y(f).

SECTION 11

her matters

required to be shown by such person in any return of such tax. Section 1.6001-1(e)

provides that the books and records required by § 1.6001-1 must be retained so long as

the contents thereof may become material in the administration of any internal revenue

- 40 -

law. See also §§ 45(b)(12), 48(a)(16), 48E(a)(3)(B) (by cross-reference to § 48(a)(12)),

and 45Y(f).

SECTION 11. TAXPAYER RELIANCE

To the extent reliance statements in Notice 2023-38 and Notice 2024-41 conflict

with this notice, the reliance statements described below shall control.

Taxpayers may rely on the rules described in sections 3 through 6 of Notice

2023-38 for the domestic content bonus credit requirements for any Applicable Project,

the construction of which begins before the date that is 90 days after the date of

publication in the Federal Register of proposed regulations on the domestic content

bonus credit requirements.

Taxpayers may rely on the two modifications14 of Table 2 in Notice 2024-41 for

any Applicable Project the construction of which begins before the date that is 90 days

after the date of publication in the Federal Register of proposed regulations on the

domestic content bonus credit requirements.

Taxpayers may rely on Notice 2024-41, in its entirety and as modified by section

4 of this notice, for the domestic content bonus credit requirements for any Applicable

Project, the construction of which begins before the date that is 90 days after the

effective date of this notice

blication in the Federal Register of proposed regulations on the

domestic content bonus credit requirements.

Taxpayers may rely on Notice 2024-41, in its entirety and as modified by section

4 of this notice, for the domestic content bonus credit requirements for any Applicable

Project, the construction of which begins before the date that is 90 days after the

effective date of this notice.

Effective January 16, 2025, taxpayers may rely on the First Updated Elective

Safe Harbor and the guidance provided in this notice for the domestic content bonus

credit requirements for any Applicable Project the construction of which begins before

14 The two modifications of Table 2 in Notice 2024-41 are (1) adding the Applicable Project “Hydropower

Facility, or Pumped Hydropower Storage Facility” and its associated list of Applicable Project Components

and categorizations and (2) replacing “Utility-scale photovoltaic system” with “Ground-mount and rooftop

photovoltaic system.”

- 41 -

the date that is 90 days after any future modification, update, or withdrawal of the First

Updated Elective Safe Harbor.

Where taxpayers may rely on either the New Elective Safe Harbor of Notice

2024-41 or the First Updated Elective Safe Harbor in this notice, a taxpayer may apply

only one of the above-referenced safe harbors, and its associated cost percentages,

and use it exclusively.

Taxpayers may treat the classifications of any Applicable Project Components or

Manufactured Product Components that are listed within the tables provided in sections

5-7 of this notice as also being listed in Table 2 of Notice 2023-38

ve Safe Harbor in this notice, a taxpayer may apply

only one of the above-referenced safe harbors, and its associated cost percentages,

and use it exclusively.

Taxpayers may treat the classifications of any Applicable Project Components or

Manufactured Product Components that are listed within the tables provided in sections

5-7 of this notice as also being listed in Table 2 of Notice 2023-38. To the extent Table 2

of Notice 2023-38 and the tables provided in sections 5-7 of this notice are inconsistent

regarding the classification of Applicable Project Components or Manufactured Product

Components, the taxpayer may elect which set of classifications to use and must

consistently apply the related classifications to all the other Applicable Project

Components or Manufactured Product Components of the Applicable Project.

SECTION 12. PAPERWORK REDUCTION ACT

Any collection burden associated with this notice is accounted for in Office of

Management and Budget (OMB) control numbers 1545-0123 and 1545-0047. The

reporting requirements from section 9 of this notice and the recordkeeping requirements

from section 10 of this notice are associated with the IRA-related changes to Form 3468

and Form 8835 that were approved, and will continue to be approved, under OMB

control numbers 1545-0123 and 1545-0047. This notice does not alter any previously

approved information collection requirements and does not create new collection

requirements not already approved by OMB.

- 42 -

SECTION 13. EFFECT ON OTHER DOCUMENTS

Notice 2023-38 and Notice 2024-41 are both modified as provided in this notice.

SECTION 14. DRAFTING INFORMATION

The principal author of this notice is the Office of Associate Chief Counsel

(Energy, Credits, and Excise Tax). However, other personnel from the Treasury

Department and the IRS participated in its development. For further information

regarding this notice, call the energy security guidance contact number at (202) 317-

5254 (not a toll-free call).