Applications: Battery Energy Storage Systems (BESS)

BESS Safe Harbor Table Another provision of the ITC is a new ‘safe harborʼ table. This guidance from the IRS allows taxpayers to determine a projectʼs domestic content percentage by relying on additive fixed percentages for specifically identified U.S. manufactured components or subcomponents, rather than relying on the manufacturer disclosing its actual direct cost to manufacture products. Projects also can qualify for the domestic content bonus under earlier IRS guidance in Notice 202338 by determining an energy projectʼs total percentage of its manufacturerʼs U.S. direct costs of products over all manufacturerʼs direct costs of U.S. and non-U.S. products. However, the new safe harbor will make it unnecessary to track down all manufacturerʼs costs for many developers and sponsors of energy projects.

Source:Notice 202508 Domestic Content guidance

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