US details new China limits for clean energy tax credits

Published Fri, Feb 13, 2026 · 11:30 AM

THE Trump administration issued new guidance on the use of foreign materials and components in US clean energy projects, in a move that would further limit access to lucrative tax credits.

Guidelines issued by the Treasury Department on Thursday (Feb 12) detail restrictions affecting battery cells, solar wafers and other equipment commonly used in renewable energy projects. Among other limits, the rules bar material from China and other US adversaries, and lay out other constraints based on company ownership or other financial ties to the Asian nation. The provisions include the ability of the Internal Revenue Service to audit for compliance within six years.

The rules, when finalised, could have an outsized influence on many solar, wind and battery projects because many developers rely on materials from China. Companies have been eagerly awaiting the guidance so they can make final investment decisions for their installations. Several large leading investment banks have been hesitant to make clean energy investments until the new foreign ownership rules are laid out.

Chinese solar stocks fell on Friday. Jinko Solar dropped as much as 4.7 per cent, Trina Solar were down as much as 2.9 per cent and Longi Green Energy Technology slipped 1.3 per cent. The declines tracked a wider downturn in regional equities markets.

The notice offers clearer guidance to domestic solar manufacturers weighing investments in the US, Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, said. “The additional clarity will help advance the urgent task of de-risking America’s energy supply chains from Chinese influence,” he said.

The restrictions, which were part of US President Donald Trump’s signature tax-and-spending bill, follow an executive order in July signalling stricter limits for the tax credits.

In anticipation of the new rules, some clean energy companies with ties to China have moved their operations to the US or reduced financial ties to Chinese firms.

The latest guidance aligns with expectations and does not impose any unexpected compliance burdens, Mike Hall, chief executive officer of solar pricing and data provider Anza Renewables, said. “It’s important to remember that these guidelines do not apply to projects that were safe harboured before Jan 1, 2026,” he added. BLOOMBERG