The Domestic Content Bonus Credit is an exceptional way to maximize savings on your commercial solar installation, while simultaneously supporting the local economy and manufacturing sector. In this article, we’ll explore the ins and outs of this incentive so that you can understand how to target the Domestic Content Credit for your Business’ Solar System.
Please note, this article is for informational purposes only. We are not tax professionals, and no part of this may be considered legal or tax advice. Be sure to consult with a tax professional to make sure you can claim the credit for your business.
What Is the Domestic Content Bonus Credit?
The Domestic Content Bonus Credit is part of a suite of incentives designed to promote the use of American-made solar equipment in commercial solar projects. At its core, this credit aims to encourage businesses to prioritize U.S.-manufactured solar components such as panels, inverters, and racking systems.
By doing so, companies can benefit from an additional 10% credit on top of the standard, 30% Investment Tax Credit (ITC), leading to substantial financial savings. Beyond the immediate fiscal advantages, opting for domestic content supports American manufacturers, job creation, and helps build a more resilient supply chain.

Eligibility Requirements
To qualify for the Domestic Content Bonus Credit, businesses must meet specific criteria. Key eligibility requirements include:
- Project Type: The installation must be classified as a commercial solar project. Residential projects do not qualify for this bonus credit.
- Eligible Equipment: A significant portion of the solar equipment must be sourced from U.S. manufacturers. Typically, this includes solar panels, inverters, and mounting systems.
- Minimum Threshold: The project must meet a minimum percentage of domestic content, usually specified as a percentage of the total equipment costs. This percentage varies by product and manufacturer, so it’s crucial to stay updated on current thresholds.
Steps to Claim the Credit
The process of claiming the Domestic Content Bonus Credit is straightforward, but does require careful attention to detail. Here’s a step-by-step guide:
- Document Domestic Sourcing: Collect comprehensive documentation that verifies the domestic origin of your solar project’s equipment. This can include invoices, certificates of origin, or manufacturer statements.
- Complete IRS Forms: The primary form required is the IRS Form 3468. This form is used to calculate the Investment Tax Credit and to claim the Domestic Content Bonus Credit. Be sure to include all necessary documentation and keep thorough records.
- Consult a Tax Professional: Given the complexity of tax laws and potential changes, consulting with a tax advisor ensures compliance and optimizes your financial benefits.
- Submit with Annual Tax Return: Once your documentation is complete and verified, submit the necessary forms along with your annual tax return to claim your credit.
Conclusion
Choosing to integrate domestic content in your solar projects not only bolsters the American manufacturing industry but also unlocks considerable financial rewards for your business. The Domestic Content Bonus Credit exemplifies how sustainable practices and financial prudence can go hand in hand. At Virtue Solar, we are committed to guiding your company through the complex landscape of solar incentives, ensuring a smooth transition to clean energy that supports local economies.