Why Compliance Matters
Last reviewed
The Inflation Reduction Act created $369 billion in clean energy tax credits. It also created compliance obligations most project teams aren't built to meet. FEOC, Prevailing Wage & Apprenticeship, Domestic Content, and Beginning of Construction requirements are complex. Piecemeal compliance leaves gaps. Empact manages all four requirements across the full tax credit lifecycle, from initial financing through the recapture window.
The short answer
Clean energy tax credit compliance matters because IRA and OBBB credits are conditional. Four compliance regimes (FEOC, PWA, Domestic Content, BOC) determine whether a project earns the full 30 to 40 percent ITC, or reverts to a 6 percent base rate. A single undocumented gap can trigger recapture years after placement in service.
Why Compliance Matters
The Inflation Reduction Act created $369 billion in clean energy tax credits. It also created compliance obligations most project teams aren't built to meet. FEOC, Prevailing Wage & Apprenticeship, Domestic Content, and Beginning of Construction requirements are complex. Piecemeal compliance leaves gaps. Empact manages all four requirements across the full tax credit lifecycle, from initial financing through the recapture window. A gap in any one of them can put your project's tax credit value at risk.
Tax equity investors and credit buyers require documented compliance before deals close. If your records aren't audit-ready at diligence, your financing timeline may be at risk.
You may not be able to reconstruct compliance after the fact. Documentation must be built during construction, not after.
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Issues / Contractor / Week
Empact identifies an average of 1.6 compliance issues per contractor per week, most caught and corrected before they reach your counsel or investors.
What's at Stake
Investment Tax Credit (ITC)
Non-compliance drops you back to 6%, or triggers full recapture.
Production Tax Credit (PTC)
Non-compliance drops you back to base rate, or triggers full recapture.
Real-Time Risk Management
Empact's platform and expert team proactively identify and resolve compliance issues during construction before they reach your counsel or your investors.
Audit-Ready Documentation
Empact compiles comprehensive compliance reporting and audit materials across all requirements, so your records are defensible from day one, not reconstructed after the fact. Empact draws from original documents and supplier records, so your compliance file reflects what actually happened, not what was self-reported.
Investor-Ready Certifications
Tax equity investors and credit buyers require documented compliance before deals close. Empact structures each engagement so your records satisfy due diligence from day one.
NexusIQ™, Empact's purpose-built compliance platform, is what makes all of this possible.
Empact's team combines technical and regulatory expertise built specifically for the clean energy market. Documentation structured to hold up under IRS scrutiny from day one.
We don't hand you a checklist. We conduct the review, organize the documentation, and deliver certifications your tax counsel can rely on.
Each engagement ends with documented, defensible compliance your tax counsel and investors can rely on at closing and through the full life of the tax credit.
The Inflation Reduction Act and OBBB created the largest clean energy tax credits in US history, but they are conditional on documented compliance with FEOC, Prevailing Wage & Apprenticeship, Domestic Content, and Beginning of Construction rules. A single undocumented gap can cut a 30 to 40 percent credit back to a 6 percent base rate, or trigger full recapture years after a project is placed in service.
Without documented Prevailing Wage & Apprenticeship compliance, a project loses the 5x credit multiplier and reverts to the base ITC of 6 percent or base PTC of $0.005 per kWh. On a typical utility-scale project, that gap can represent tens of millions of dollars in lost credit value, plus potential cure payments to affected workers.
In most cases, no. PWA records, BOC evidence, FEOC supplier attestations, and Domestic Content cost data have to be captured at the source, in real time, from contractors, suppliers, and payroll systems. Once those parties demobilize, the underlying records are difficult or impossible to recover at the level of detail tax counsel and investors require at diligence.
The taxpayer claiming the credit is legally responsible, typically the project owner or tax equity partnership. In practice, tax equity investors and credit buyers require developers to deliver documented compliance before they fund or close, so the operational burden sits with the developer and their compliance partner.
Before groundbreaking. BOC documentation must be in place before construction starts to lock in the applicable credit rules. FEOC supplier screening should happen before procurement commitments. PWA monitoring needs to begin with the first contractor on site. Engaging Empact at deal financing produces a complete, defensible record across each stage.
On a 100 MW solar project with roughly $200M in capex, full compliance can support an ITC of approximately $80M at the 40 percent rate. A single missed compliance area can drop the credit to the 6 percent base rate, a difference of roughly $68M on one project. Recapture during the post-placement-in-service window can claw back credits that were already monetized.
Empact works alongside your team and counsel from deal financing through the full tax credit lifecycle, so your credits are protected before they're ever at risk.
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