Concentro – Weekly Recap

Concentro is highlighting new IRS Notice 2026-15 as an incremental step toward clarity on Foreign Entity of Concern rules for U.S. clean energy and infrastructure projects. The firm notes that while the guidance helps with cost allocation and compliance mechanics, it leaves critical questions on FEOC ownership, control, and recapture risk unresolved.

According to Concentro’s analysis, domestic content safe harbor tables can now be used via a “Cost Percentage Safe Harbor” to calculate material assistance cost ratios, excluding non-listed items such as steel and iron. The notice also introduces a temporary reliance safe harbor for supplier certifications, including partial certificates focused on potentially FEOC-exposed direct costs.

These changes may reduce administrative friction for project sponsors and their supply chains, potentially easing near-term compliance and financing discussions. The IRS also provides more detail on tracking and averaging methods for allocating costs to projects, qualified interconnection equipment, and relevant lookback periods, improving tax incentive modeling.

However, Concentro underscores that the IRS has not yet clarified how FEOC ownership and effective control will be defined, nor how recapture mechanisms will work over time. This continuing ambiguity preserves a layer of regulatory and tax risk that is particularly relevant for tax equity investors, lenders, and developers committing long-dated capital.

For investors, the notice offers enough procedural clarity to support more confident modeling of Inflation Reduction Act-linked benefits, but not enough to fully resolve long-term FEOC exposure. As a result, detailed transaction structuring, robust supply chain due diligence, and conservative risk assessments are likely to remain central to project economics and valuations in the sector.

Overall, Concentro’s commentary suggests the week brought constructive but incomplete progress, with IRS Notice 2026-15 improving operational clarity while leaving strategic ownership and recapture questions still open for U.S. clean energy and infrastructure stakeholders.