Developer/IPP
Maximize Incentives 4 min

TPOs and Manufacturers: Boosting Domestic Content for Better Solar Leases

How Third Party Owners can collaborate with manufacturers to unlock 10% higher tax credits for lower leases and better margins.
3PLX Team by 3PLX Team Maximize Incentives 4 min

Third Party Owners (TPOs) of solar systems are at a pivotal moment. To maximize benefits under the Inflation Reduction Act (IRA), TPOs must partner with component manufacturers to increase the availability of SKUs (Stock Keeping Units) that meet Domestic Content thresholds. At 3PLX, we see this collaboration as a game-changer—unlocking an additional 10% in Investment Tax Credits (ITCs) that TPOs can pass on as discounted leases, reduced payoff amounts, and improved profit margins for their contractor networks.

The IRA offers a base 30% ITC for solar projects, with a bonus 10% for systems using a significant portion of U.S.-made components. However, many residential and commercial TPOs struggle to meet these Domestic Content rules due to limited availability of qualifying parts—panels, inverters, racking, and more. This gap limits their ability to claim the full 40% ITC, reducing savings they can offer customers.

Here’s why TPOs need to act:

  • Customer Savings: The extra 10% ITC can lower lease payments—for example, dropping a $100/month lease to $90/month—or shorten payoff periods from 6 years to 5.5 years.
  • Contractor Margins: Higher tax credits increase TPO profitability, enabling better payouts to installation partners.
  • Market Edge: Affordable leases make TPOs more competitive, driving demand in residential and commercial markets.

Collaboration with manufacturers is key. TPOs should:

  1. Identify high-demand components (e.g., U.S.-made racking or inverters) and share specs with manufacturers.
  2. Advocate for expanded production of qualifying SKUs, leveraging bulk order commitments to incentivize manufacturers.
  3. Partner on certification processes to ensure components meet IRA Domestic Content standards.

At 3PLX, we’re supporting TPOs in this shift. For a 5 MW commercial project, switching to domestic racking and wiring added $200,000 in ITCs (10% bonus on a $2M system). This allowed the TPO to cut lease rates by 8%, winning a multi-site contract with a retail chain. “TPOs that align with manufacturers on Domestic Content will lead the market,” said JR Mejia, CEO of 3PLX. “It’s about smarter incentives and stronger partnerships—contact us at 561.800.3559 or info@3plx.net to explore this strategy.”

The challenge? Manufacturers need clear demand signals, and TPOs must navigate upfront cost increases for domestic parts. But the payoff—higher ITCs, lower customer costs, and better margins—makes it a no-brainer for scaling solar adoption.

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