In Brief:
- New Interim Guidance: On February 12, 2026, the U.S. Department of the Treasury and the Internal Revenue Service issued Notice 2026-15, providing interim guidance on how taxpayers may satisfy the material assistance requirements enacted by the One Big Beautiful Big Act (OBBBA) for certain clean energy tax credits.
- Expanded Foreign Entity Focus: The notice provides new detail on identifying prohibited foreign entities (PFEs) and calculating the Material Assistance Cost Ratio (MACR), a threshold test that can fully disallow credits if not satisfied.
- Safe Harbors Introduced: Treasury and the IRS outline interim safe harbors intended to reduce data burdens and provide additional certainty while more comprehensive regulations are developed.
- Practical Takeaways: Takeaways for project owners, tax credit transfers, and tax equity, especially towards the “all or nothing” determination.
Detailed Article
Overview of Notice 2026-15
Notice 2026-15 provides interim guidance on the material assistance and prohibited foreign entity restrictions applicable to certain clean energy tax credits, including the clean electricity production credit under IRC §45Y, the clean electricity investment credit under IRC §48E, and the advanced manufacturing production credit under IRC §45X.
Under the OBBBA, Congress adopted a fundamentally different approach to foreign content restrictions. Rather than focusing solely on where components are manufactured, the statute disallows credits where a qualified facility, energy storage technology (EST), or eligible component receives material assistance from a prohibited foreign entity. Failure to satisfy the material assistance requirement results in complete disallowance of the credit, making compliance an all-or-nothing determination.
Notice 2026-15 confirms that material assistance is measured using a Material Assistance Cost Ratio (MACR), which compares qualifying costs to total direct costs associated with manufactured products (MPs) and manufactured product components (MPCs) incorporated into a facility or EST.
Interim Safe Harbors
Identification Safe Harbor: Permits reliance on 2023–2025 Safe Harbor Tables to identify MPs, MPCs, and constituent materials.
Cost Percentage Safe Harbor: Allows use of IRS-assigned cost percentages instead of actual direct costs.
Certification Safe Harbor: Allows reliance on supplier certifications regarding PFE status and costs, provided the taxpayer has no reason to know the certification is inaccurate.
Practically Why This Matters for Project Owners, Tax Credit Transfers, or Tax Equity
Notice 2026‑15 is particularly significant for project owners seeking to monetize clean energy tax credits through transfers under IRC §6418 or through tax equity financing. The material assistance rules operate as a complete disallowance provision, any failure to satisfy the MACR or prohibited foreign entity (PFE) requirements can render credits unavailable for monetization, regardless of project economics or performance.
From a project owner’s perspective, this guidance effectively moves material assistance compliance to a front‑end gating issue. Credit buyers and tax equity investors are expected to require enhanced diligence, expanded representations and indemnities, and robust documentation demonstrating PFE compliance and appropriate reliance on safe harbors. Inadequate support may delay closings, reduce pricing, or shift risk back to the sponsor through indemnities or other credit support.
In addition, the IRS is expected to focus on the owner’s methodology and documentation, including consistency in MACR calculations, support for total direct costs, reasonable reliance on supplier certifications, safeguards against circumvention, and substantiation of beginning of construction. As a result, project owners should expect heightened documentation and coordination requirements across procurement, construction, and financing teams to ensure credits remain transferable and financeable.
For projects financed through tax equity, Notice 202615 elevates material assistance compliance to a core underwriting issue rather than a postclosing compliance matter. The failure to satisfy the MACR or prohibited foreign entity (PFE) requirements is very concerning as it results in full credit disallowance, tax equity investors are likely to focus closely on supply chain assumptions, cost methodologies, and reliance on interim safe harbors during diligence. From a project owner’s perspective, unresolved material assistance risk may translate into more conservative underwriting, additional sponsor representations, indemnities, or reserves, and increased scrutiny of procurement and construction documentation. Projects with limited visibility into component sourcing or cost composition may face longer diligence timelines or reduced financing flexibility.
For tax credit transfers under IRC §6418, Notice 2026‑15 has direct implications for credit marketability and execution risk. Credit buyers generally lack control over project development and operations, placing greater emphasis on front‑end eligibility and documentation at the time of transfer. As a result, project owners should expect buyers to require detailed support for MACR calculations or safe harbor reliance, robust PFE certifications from suppliers, and contractual protections addressing anti‑circumvention risk. Inadequate documentation or uncertainty around material assistance compliance may delay transfers, shift risk back to the sponsor through indemnities or pricing adjustments, or limit the pool of willing buyers altogether.
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