n-25-08.pdf

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Part III – Administrative, Procedural, and Miscellaneous

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

N
otice 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. 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).

- 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. 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.
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.

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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.
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.

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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). 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. 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
. 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. 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.
With respect to Manufactured Product Components: (i) “Climate Control” is
renamed “Thermal Management System”; (ii) “Enclosure” is renamed “Enclosure &

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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.
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.
.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.

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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
Production
6
4.7
7
3.7
7
6.7
7
4.8
7

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

1.2
7
0.9
7
1.7
7
1.2
7

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 9.4
7
7.3
7
- -
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 5.8
8
4.7
8
7.2
8
5.6
8

Inverter
9
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 0.9
8
0.7
8
0.5
8
0.4
8

Non-Steel
Roof
Racking
Structural Fasteners 3.5 2.9 4.4 3.4
Rails 15.0 12.2 18.7 14.6
Production 1.1
8
0.9
8
1.4
8
1.1
8

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.
(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.
(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 electric i ty.
(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.

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(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 Val ue
Wind Turbine Blades 31.2
Rotor Hub 9.9
Nacelle 47.5
Power Converter 8.9
Production 0.9
11

Wind Tower Flanges Preform
12
0.8
Production 0.8
11

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.
(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)
.

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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.
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. 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.

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.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

8.0
13
2.9
13

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

1.9
13
4.3
13

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

2.0
13
3.1
13
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.
(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.

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(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).
(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

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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. 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
.
(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.
(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.
(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.
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:
DCP
Domestic MSI
x Nameplate Capacity
Domestic MSI
Nameplate Capacity
MSI

For purposes of this formula:
(a) DCP
Domestic MSI
means the Updated Assigned Cost Percentage derived from
the tables in this notice of the Mixed Source Item.

- 29 -

(b) Nameplate Capacity
DomesticMSI
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 Capacity
MSI
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.
(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

- 30 -

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.
(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

- 31 -

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.
(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

- 32 -

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.
(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

- 33 -

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. 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

- 34 -

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.
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.
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%. 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.
(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. 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

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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, 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
aff irmatively 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

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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 modifications
14
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.
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.”

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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. 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.

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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).