The 10% Domestic Content Adder can push your federal solar tax credit from 30% to 40%, but most homeowners won’t automatically qualify. In 2025, navigating the IRS rules and acting early could mean the difference between maximizing your savings or missing out entirely. Here’s how some Florida homeowners are making it happen before the clock runs out.
🌞 What’s the 10% Domestic Content Adder?
Under the Inflation Reduction Act, qualifying solar and battery projects can earn up to a 40% federal tax credit. This is made up of the standard 30% Credit plus a 10% Domestic Content Adder (also called the Domestic Content Bonus Credit).
To qualify for this additional 10%, your project must meet two requirements:
1. Steel and Iron Requirement: All structural materials like racking, ground screws, and rebar must be 100% U.S.-sourced.
2. Manufactured Products Requirement: At least 40% of the total component costs (including panels, batteries, and inverters) must come from U.S.-made or U.S.-assembled goods.
Meeting these thresholds can add thousands to your federal incentive. However, how the project is filed with the IRS determines if you can claim the bonus.
❌ Why Most Homeowners Won’t Automatically Qualify
Most homeowners file their solar installation under IRS Section 25D using Form 5695. This form provides the standard 30% residential solar credit but does not allow claims for the 10% Domestic Content Adder.
The bonus is only authorized under other IRS sections:
- §45 / §45Y: Production-based credits for utility-scale projects
- §48 / §48E: Investment-based credits for commercial or business energy systems
These use different forms (Form 3468 or Form 8835) and require a domestic content certification process.
As of 2025, the IRS has not added the 10% Domestic Content Adder to Section 25D filings. That means if you follow the standard residential process, you cannot claim it.
✅ But That Doesn’t Mean You’re Shut Out
While the 10% Domestic Content Adder isn’t available through the standard residential tax credit, certain legal structures may allow you to qualify under the Section 48 commercial rules. Depending on your property and usage, you may still capture the full 40% credit.
✅ 1. Home-Based Business or LLC Ownership
If you operate a business from your home, you could:
- Create an LLC or S-Corp to own or finance the solar system
- Allocate part of your system to business operations (home office, workshop, storage, or production space)
- Claim the 30% ITC plus the 10% Domestic Content Adder under Section 48 using Form 3468
- Potentially use depreciation and other business tax deductions
This approach works well for consultants, tradespeople, realtors, and other professionals who work from home.
✅ 2. Rental Property or Mixed-Use Conversion
If part or all of your home is a rental property, such as an ADU, duplex, or Airbnb:
- You may treat the installation as a business expense under Section 48
- The rental-use portion could qualify for the 10% Domestic Content Adder
- You’d file using Schedule E and Form 3468
- You can document U.S.-made content using IRS Safe Harbor cost tables
This option is common for property owners generating consistent rental income.
✅ 3. Third-Party LLC Ownership or Lease Model
Some homeowners use a third-party entity to own the solar system:
- A separate LLC or trust installs and owns the equipment
- The LLC claims the commercial tax credits, including the 10% Domestic Content Adder
- The system is leased back to the homeowner
- The homeowner benefits from lower energy bills and stable rates
This setup can work for multigenerational families, estate planning, or investment properties.
🧠 What Counts as “Made in the USA”?
To meet the domestic content rules:
- 55% or more of component costs must be U.S.-made
- All structural steel and iron must be 100% sourced domestically
- U.S.-made subcomponents inside foreign assemblies may still qualify
Exceptions apply if U.S.-made components are unavailable, fail to meet quality standards, or raise total costs by more than 25%. In these cases, imported goods may be used while still meeting IRS guidelines.
⚠️ Important Disclaimer
Florida Power Services is a licensed so lar contractor, not a tax advisor or CPA. We do not provide tax filing, entity structuring, or legal guidance.
If you’re considering structuring your project to qualify for the 10% Domestic Content Adder, speak with a qualified tax professional to confirm your eligibility and file the correct forms.
Our focus is delivering reliable, code-compliant solar systems that meet domestic content requirements when requested. Your accountant will handle the IRS side.
📅 Don’t Miss Out. The Clock Is Ticking
The full 40% federal incentive, including the 10% Domestic Content Adder, is set to end on December 31, 2025, unless extended by Congress. Once the deadline passes, homeowners could lose thousands in potential tax savings.
Permitting offices across Florida are already facing delays of 30 to 45+ business days, and the backlog grows during the final quarter of the year. In late fall, this slowdown is compounded by utility approval wait times, inspector availability, and holiday office closures.
If your project is not fully installed and operating by the deadline, you will not qualify for the bonus credit. Starting early ensures you have enough time to navigate each stage, from engineering and permitting to installation and utility sign-off, without risking your eligibility. Florida Power Services is prepared to move quickly and efficiently so your system is ready well before the end-of-year crunch.
☀️ Get Your Solar Project Started the Right Way
Whether you’re aiming for the 30% residential credit or working with your tax professional to qualify for the full 40%, the first step is getting your system designed and submitted for permits immediately.
Florida Power Services has been installing high-performance solar systems in Florida since 2007. Our team manages everything in-house:
- Domestic content–compliant designs and sourcing
- Rapid permitting to beat year-end slowdowns
- Hurricane-rated equipment built to last in Florida conditions
- Certified installers with 20+ years of combined experience
- Ongoing support long after installation is complete
We’ll help you lock in your solar incentives, secure your equipment, and get your system operational before the deadline.
📞 Contact Florida Power Services today to start your project and see if you can maximize your savings with the 10% Domestic Content Adder.
