U.S. Renewables, Battery Sectors Face New Supply Chain Restrictions in 2026

Tax attorney Nicole Elliott was quoted in an S&P Global article about how the renewable energy and battery storage industries are preparing for new foreign supply chain restrictions that will affect eligibility for federal clean energy incentives. President Donald Trump's sweeping budget bill enacted in July 2025 added foreign entity of concern (FEOC) limitations to several credits, including the Section 45Y production tax credit (PTC), Section 48E investment tax credit (ITC) and advanced manufacturing production tax credit, tightening scrutiny of material support tied to prohibited foreign entities. Ms. Elliot noted that many developers and manufacturers have stockpiled inventory to create a short-term runway while the U.S. and other non-FEOC sources ramp up, but delayed guidance from the U.S. Department of the Treasury has added uncertainty as companies try to rework sourcing and document compliance.

"The challenge largely lies in the material assistance rules, requiring taxpayers to gather significant information about their suppliers," she said.

READ: U.S. Renewables, Battery Sectors Face New Supply Chain Restrictions in 2026