Leveraging the Inflation Reduction Act in 2025: A Business Setup Guide for Foreign-Owned Climate Tech and Renewable Energy Companies

2025: America's Clean Energy Moment — and Your Window to Join It

When OCI Holdings, via its U.S. arm Mission Solar Energy, announced a $265 million investment to add 2 GW of solar-cell production capacity at its San Antonio campus, it underscored a broader truth: the IRA has meaningfully accelerated domestic clean-energy manufacturing and investment. Clean Investment Monitor reports that, over the most recent four quarters, roughly $276 billion has been invested across U.S. clean-energy manufacturing, electrification, and related projects — a clear signal that private capital is flowing into the sector. At the same time, the Treasury and the IRS have continued to refine rules around domestic content and prevailing-wage/apprenticeship requirements (including updated guidance in 2024–2025), increasing the compliance bar for projects that wish to capture bonus credits.

The result: the opportunity to capture IRA incentives remains large, but it now favors companies that move quickly, structure intentionally in the U.S., and document their supply chains and labor practices from day one.

Building a U.S. Entity That Qualifies for IRA Incentives

The first step for any global entrant is clear: your U.S. business structure must qualify under current tax and energy laws. Under the Inflation Reduction Act, foreign companies that establish a U.S.-domiciled entity—such as a C-Corporation or LLC taxed as a corporation—can claim powerful incentives if the project itself meets eligibility criteria.

Understanding the Core Incentives

The IRA introduced two landmark programs for clean energy businesses:

• The Investment Tax Credit (ITC) — a 30% federal tax credit for renewable energy projects like solar, wind, battery storage, and microgrids.
• The Production Tax Credit (PTC) — offering per-kilowatt-hour credits for energy produced over time.

Homeowners claim similar benefits through the Residential Clean Energy Credit, filed using IRS Form 5695, which covers 30% of costs for solar, geothermal, wind, and battery installations.

But as of July 4, 2025, the OBBBA tightened IRA provisions:

• Projects with ownership links to "foreign entities of concern" (including China and Russia) may be disqualified.
• Construction must begin by July 4, 2026, and projects must be placed in service by December 31, 2027, to retain full credit eligibility.
• The new act accelerates the phaseout schedule for wind and solar projects after 2027.

Strategic Setup Steps for Foreign Companies

1. Form a U.S.-domiciled entity (C-Corp or LLC) to ensure eligibility for federal and state-level tax benefits.
2. Create Special Purpose Vehicles (SPVs) for each project to isolate liability and manage credit allocation.
3. Design your capital stack—ensure investment funds flow through the U.S. entity to qualify for direct pay or transferable credits.
4. Verify your supply chain meets "domestic content" and "prevailing wage/apprenticeship" requirements to earn bonus credits.

This structural discipline ensures you qualify for federal benefits while protecting your operations from OBBBA compliance risks.

Case Studies: How Global Firms Are Winning Under the IRA

OCI Holdings (South Korea)
OCI's Texas investment directly aligns with IRA tax incentives. By localizing production and sourcing materials from U.S. suppliers, the company qualified for multiple Section 48C advanced manufacturing credits while avoiding the OBBBA's prohibited foreign entity restrictions.

Albemarle, Siemens Energy, and Cummins (U.S.-based global firms)
In 2024, the U.S. Department of Energy announced $1.93 billion in IRA-backed clean energy credits for Albemarle, Cummins, and Siemens Energy. These projects expand U.S. lithium processing, grid modernization, and clean manufacturing—showing how large-scale players are monetizing federal programs through strategic entity design and domestic sourcing.

First Solar (U.S.)
First Solar expanded its Ohio and Alabama manufacturing lines after the IRA's passage, investing $1.1 billion to build thin-film solar modules domestically. Its compliance with domestic content rules secured substantial bonus credits, giving it a long-term pricing advantage.

Takeaway: These firms prove that policy-aware structuring drives profitability. For foreign founders, mirroring these approaches—localized production, U.S. incorporation, and transparent supply chains—is the path to capturing similar returns.

Your 2025 Execution Roadmap: From Incorporation to Incentive Claim

1. Incorporate early (Q4 2025 at latest): Establish your U.S. entity before the next tax cycle and register your SPVs.
2. Choose the right location: States like Texas, Arizona, Georgia, and New York offer strong renewable ecosystems and state-level clean energy credits.
3. Begin construction within 12 months: Projects starting after July 4, 2026, risk reduced or lost credits.
4. Maintain documentation: Keep detailed wage, apprenticeship, and domestic sourcing records for IRS verification.
5. Engage local experts: Use U.S.-based attorneys, CPAs, and regulatory advisors familiar with Treasury and Department of Energy guidance.

Foreign founders that begin setup now stand to lock in the most generous credit period before OBBBA phaseouts accelerate.

Your Clean Energy Expansion Toolkit for 2025

Download or create a toolkit including:

• Entity Setup Flowchart: Parent → SPV → Project structure
• Eligibility Checklist: ITC/PTC requirements, PFE vetting, direct pay eligibility
• Compliance Calendar: Key 2025–2026 milestones for construction and filings
• Supply Chain Vetting Template: Vendor documentation for non-PFE status and domestic content compliance

This toolkit keeps your expansion plan actionable and audit-ready.

2025 Policy Update: What's New

In mid-2025, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued updated guidance under the Inflation Reduction Act (IRA), refining definitions of "foreign entities of concern," tightening documentation standards for domestic content, and clarifying audit procedures for clean-energy tax credit claims. Additional Treasury guidance on the precise meaning of "beginning of construction" and expanded domestic-content safe-harbor rules is expected by late 2025.

Final Word: Structure Today, Scale Tomorrow

2025 is the year the U.S. rewards builders—not by geography but by compliance. The Inflation Reduction Act still offers the most generous clean energy incentives in history, but foreign founders who delay structuring may miss out as OBBBA deadlines near.

CrossVentura's team helps international climate tech and renewable energy companies design compliant business setups, optimize federal and state tax credit capture, and accelerate market entry.

The U.S. clean energy transformation is happening—make sure you own a piece of it.