A new Crux survey suggests the U.S. clean energy market is moving quickly on Foreign Entity of Concern (FEOC) compliance, but many firms still don’t feel ready for what is in store for 2026.

In an October 2025 survey of 50 developers, manufacturers, and other market participants, more than 90% said they have already begun some combination of ownership reviews, contract audits, and supply-chain mapping, yet only 38% described themselves as fully prepared for 2026.

The compliance push is being driven by the FEOC framework enacted under the One Big Beautiful Bill, which ties eligibility for major clean energy incentives, including the clean electricity production tax credit (PTC) and investment tax credit (ITC) under Sections 45Y and 48E.

The Section 45X advanced manufacturing production tax credit is dependent on whether a taxpayer is a prohibited foreign entity (PFE), a PFE has effective control through contracts, or if the project’s supply chain exceeds material-assistance cost-ratio (MACR) limits.

Entity-level restrictions generally apply beginning with tax years after July 4, 2025, while MACR tests begin to bite for 45Y/48E projects that start construction after 2025 and for 45X components sold beginning in 2026.

Survey results indicate ownership exposure is not where most firms expect the biggest problems to emerge. Four in five respondents said they have no specified foreign entity (SFE) or foreign-influenced entity (FIE) ownership, and the remaining responses were concentrated below 25%, with a smaller slice reporting ownership below 40%.

Governance rights tied to foreign ownership also appeared uncommon, with fewer than 10% saying SFE/FIE owners can appoint officers or directors. Where ownership issues do exist, some firms reported mitigation steps such as resolving governance rights or liquidating SFE/FIE stakes.

Contracting, however, remains a key uncertainty, especially around the still-developing concept of effective control. Crux found that 54% of respondents reported no contracts at risk after their reviews, while 36% said reviews are still underway, 10% indicated they do have contracts that include effective-control payments to prohibited foreign entities (PFE).

Among those identified problematic payment provisions, roughly 80% said they plan to revise contract terms to remove effective-control elements, and some also flagged that certain agreements were signed before July 4, 2025, an issue expected to be addressed further in Treasury guidance.

A longer tail risk also looms for Section 48E. Beginning in 2028, an effective-control payment made within 10 years of a facility is placed in service can trigger full ITC recapture.

Supply-chain traceability is where the survey shows the largest execution gap. While substantially all respondents reported that they have begun mapping, 70% said their supply chains are only partially mapped, and 30% reported their supply chains are fully mapped, an early indicator that many companies may still be building the data needed for MACR calculations and audit defense.

Verification practices are also fragmented, with 48% relying primarily on internal verification, 42% expecting routine third-party audits, and 10% relying solely on supplier certifications.

To document MACR compliance, most firms are adopting a layered approach. Nearly 70% reported using both IRS cost safe-harbor tables and supplier certifications, compared with 10% using only safe-harbor tables and 20% relying only on supplier certifications.

That posture is increasingly being pushed downstream through procurement, as more than 80% of project developers said they require suppliers/manufacturers to represent that their products are not produced by PFEs and/or that suppliers do not know upstream parties are PFEs, with 62% requiring both representations.

The survey points to solar modules, battery packs, and inverters as the most exposed segment categories with parts directly or indirectly sourced from PFEs. In contrast, wind components were viewed as comparatively lower risk and more diversified across the U.S., Europe, and Japan.

Even with high engagement, many firms are leaning heavily on outside support to interpret evolving rules and build defensible processes. Nearly three-quarters of respondents reported engaging external legal or consulting advisors, and respondents also expressed a desire for standardization in documentation and supply-chain accounting practices.

Until Treasury and DOE provide clearer guidance, particularly on effective control, anti-circumvention, and MACR safe harbors, developers and manufacturers expect to revisit diligence already underway as the compliance framework tightens around 2026 deal flow.

Representatives from 143 solar companies have written to the U.S. Senate and House of Representatives, urging them to work with the Department of the Interior to address the July memorandum that resulted in a near-complete moratorium on solar project permitting.