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US solar domestic content rules: 2026 update and what changed

Treasury's January 2026 final rules on the IRA's 10% domestic-content adder tightened cell-eligibility tests. To qualify, modules must use US-manufactured cells (not just assembled-in-US modules with imported cells) by January 2028. Mexico-assembled modules with Chinese cells no longer qualify.

By Meera Iyer··1 min read

In 50 words: US Treasury's January 2026 final rules tightened the IRA's 10% domestic-content adder. Modules must use US-made cells (not just US assembly) by January 2028. Mexico-assembled modules with Chinese cells no longer qualify. The change accelerates US cell manufacturing investment but raises near-term module prices.

What the rule changed

The 10% domestic-content adder under IRA Section 45/48 was always conditional on a "manufactured products" test requiring a rising percentage of US-origin components. The January 2026 final rule:

  1. Closed the "cell from anywhere" loophole — by January 2028, modules need US-manufactured cells, not just US assembly
  2. Set a phased schedule: 40% manufactured-cost share from US origin in 2026, 45% in 2027, 55% in 2028
  3. Excluded Mexico-assembled modules with imported cells (previous interpretation had treated NAFTA-region assembly favourably)

Industry impact

For US utility-scale developers, the rule resets the supplier shortlist. Modules that previously qualified for the 10% adder via Mexican assembly no longer do. Tier 1 producers with US cell capacity — First Solar (always US-cell), Q CELLS (US cell line ramped 2024), and Hanwha — gain meaningful pricing power.

US-cell modules priced at a 12–18% premium versus equivalent imported-cell modules in Q1 2026. The 10% domestic-content adder largely offsets that premium for tax-credit-eligible projects.

What developers should do

  • Re-verify module supplier domestic-content status for any project commissioning post-January 2028.
  • Lock 2027–2028 module supply now if you can secure US-cell allocation. Capacity is constrained.
  • Model two scenarios: with-adder (US-cell module) and without-adder (imported-cell module). The break-even is project-specific.

What to watch next

Treasury is expected to issue clarifying guidance on inverter and tracker domestic-content tests in H2 2026. Those products have similar adder eligibility but the test methodology is less clear.

Researched and drafted with AI assistance; reviewed and edited by the named editor within 24 hours of draft.

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