Domestic Content Bonus Credit: Critical Issues Regarding the Origin of Aluminum and Steel Frames Used in Photovoltaic Modules

The frame — a structurally integral component of virtually every crystalline silicon PV module — has emerged as a valuable component in the domestic content calculus, carrying an assigned cost percentage of 4.0% to 8.5% under the Internal Revenue Service’s (IRS) elective safe harbor (IRS Notice 2025-08). For projects approaching the Adjusted Percentage Rule threshold, the origin of the frame can be decisive.

Despite the financial significance of this component, there is no definitive IRS guidance specifying what processing steps are sufficient to establish that a frame has been “produced in the United States.” In the absence of such guidance, market participants have adopted inconsistent interpretations. Some frame suppliers perform the critical extrusion or roll forming step domestically. Others claim US origin solely on fabrication in the United States (i.e., cutting aluminum profiles to length, punching holes, and snapping together) using frame profiles that were extruded or roll-formed outside the country. 

This alert examines the legal framework governing domestic content determinations for solar module frames, analyzes the manufacturing processes involved, and explains why there is significant risk that frames solely fabricated or anodized in the United States from foreign-extruded or foreign-rolled profiles may not qualify as “produced in the United States” under the applicable legal standards. 

Caution is warranted. Developers should verify that the extrusion (for aluminum) or roll forming (for steel) of frame profile sides was performed in the United States before relying on a frame supplier’s assertions of origin for purposes of the domestic content bonus credit.

The Frame Manufacturing Process: From Billet or Coil to Finished Frame

Understanding the manufacturing sequence for solar module frames is essential to evaluating domestic content eligibility. A solar module frame is the structural border surrounding the laminated cell assembly — glass, encapsulant, cells, backsheet, and junction box. It provides mechanical protection, enables mounting to racking systems, and facilitates grounding. The frame must survive 25–30 years of outdoor exposure, thermal cycling, wind and snow loads, and humidity — a demanding performance envelope.

Although individual manufacturers may vary their processes, the general steps in producing solar module frames are as follows.

• Raw Material

  For aluminum frames, the raw material is aluminum billet – cylindrical ingots of high-purity aluminum. For steel frames, the raw material is steel coil. These mill products are the starting point for the frame manufacturing process and have indeterminate commercial function – they could be processed into a wide range of unrelated products.

• Extrusion (Aluminum) or Roll Forming (Steel)

  This is the most critical and transformative step in the manufacturing process.

• Aluminum Extrusion: Billets are heated and forced through precision-engineered dies under high pressure to create cross-sectional profiles. The die determines the specific shape of the frame’s flange, web, groove, and channel geometry. The extruded profile is then cooled, straightened, and cut into standard lengths for downstream processing. Extrusion is capital-intensive: a commercial press costs several million dollars, requires significant floor space and energy infrastructure, and demands skilled operators. Die tooling is custom designed to each manufacturer’s module specification.
• Steel Roll Forming: Steel coil undergoes a series of sophisticated forming steps during the roll forming process, transforming coil stock into a frame profile with a shaped cross-section designed and engineered to meet the performance criteria of a particular model of solar module.

Extrusion and roll forming typically represent well over half of total manufacturing and capital investment costs. These processes establish the cross-sectional profile that defines the frame’s form and function.

• Anodization (Aluminum) or Galvanization/ZAM Coating (Steel)

  Extruded aluminum profiles undergo anodizing – an electrolytic oxidation process that builds a durable aluminum oxide layer on the surface, providing corrosion resistance, UV protection, and a uniform matte finish. For steel frames, coating steps such as galvanization or ZAM coating may be applied for corrosion resistance. 

• Fabrication

  Frame profiles are cut to the precise lengths required by the module format using high-speed precision saws. Cutting is typically a straightforward operation rather than a milling, lathe, or CNC machining process. Cutting does not alter the cross-sectional design of the profile.

  Additional operations include punching drainage holes, grounding slots, and mounting points. Like cutting to length, these operations do not alter the cross-sectional profile or the fundamental function of the frame side.

  The final step involves inserting corner brackets and joining the four frame sides together to form the completed frame structure. 

The Domestic Content Bonus Credit Under 26 U.S.C. § 45Y

The Inflation Reduction Act of 2022 (Pub. L. 117-169) amended §§ 45 and 48 and added new §§ 45Y and 48E of the Internal Revenue Code, providing a domestic content bonus credit for qualifying clean energy projects. The bonus credit can increase a project’s Investment Tax Credit or Production Tax Credit by 10 percentage points – a financial incentive significant enough to reshape procurement decisions across the entire US solar supply chain.

To claim the domestic content bonus credit, a project must demonstrate that the steel, iron, and manufactured products that are components of a qualified facility or qualified investment were “produced in the United States.” 26 U.S.C. § 45(b)(9). The statute requires that this determination be made “as determined under section 661 of title 49, Code of Federal Regulations” – a direct cross-reference to the Buy America Rules of the Federal Transit Administration (FTA).

Under the elective safe harbor established in IRS Notice 2024-41 and updated by IRS Notice 2025-08 (the “First Updated Elective Safe Harbor”), the frame/backrail of a PV module carries an assigned cost percentage of 4.0% to 8.5% toward the Adjusted Percentage Rule, depending on the type of system and origin of PV cells and wafers. For projects approaching the domestic cost threshold, the frame’s contribution can be the difference between qualifying and failing to qualify for the bonus credit.

The Critical Question

A manufactured product component is “considered to be of U.S. origin if it is manufactured in the United States, regardless of the origin of its subcomponents.” IRS Notice 2023-38, § 3.03(1). Manufactured means the result of “the application of processes to alter the form or function of materials or of elements of a product in a manner adding value and transforming those materials or elements so that they represent a new item functionally different from that which would result from mere assembly of the elements or materials.”

The critical question for solar module frames is whether the processes performed in the United States rise to the level of “manufacture” — a question that, as discussed below, requires careful analysis of what constitutes more than “mere assembly.”

Despite issuing three notices addressing domestic content requirements, the US Department of the Treasury and the IRS have not provided detailed guidance on how to apply the definition of “manufacturing process” or what constitutes “mere assembly” for solar module frames specifically. Nonetheless, guidance exists. 

US Congress required that “produced in the United States” for purposes of the domestic content bonus credit be “determined under section 661 of title 49, Code of Federal Regulations” – i.e., the Buy America Rules of the FTA. 26 U.S.C. § 45(b)(9)(B)(i). Accordingly, the FTA’s guidance on what constitutes a “manufacturing process” versus “mere assembly” is directly applicable to domestic content determinations for solar module frames.

In the preamble to its final rule implementing the Buy America requirements, the FTA’s predecessor provided critical guidance on what constitutes more than mere assembly: “The key element of this definition is the alteration of subcomponents to form a new product.” 56 Fed. Reg. 926, 929 (Jan. 9, 1991). The FTA then identified specific processes that constitute more than mere assembly:

The processes of alteration may include forming, extruding, material removal, welding, soldering, etching, plating, material deposition, pressing, permanent adhesive joining, shot blasting, brushing, grinding, lapping, finishing, vacuum impregnating, and, in electrical and electronic pneumatic, or mechanical products, the collection, interconnection, and testing of various elements.

56 Fed. Reg. at 929 (emphasis added).

Why Extrusion and Roll Forming Constitute More Than ‘Mere Assembly’

There is a strong argument that solar module frames manufactured in the United States from domestic or foreign mill products are “produced in the United States” for purposes of the domestic content bonus credit – provided that extrusion (for aluminum) or roll forming (for steel) is performed domestically. The analysis supporting this conclusion rests on multiple independent grounds.

1. “Extruding” and “forming” are listed first and second on the FTA’s enumeration of processes that constitute more than mere assembly. 56 Fed. Reg. at 929. When US-based extrusion or forming is coupled with all subsequent processing in the United States, the argument is overwhelming that the frame is “produced in the United States.”
2. Extrusion and roll forming fundamentally transform the raw material:
   • An aluminum billet, which is a cylindrical ingot with indeterminate commercial function that could be processed into aircraft components, beverage containers, or any number of unrelated products, is transformed through high-pressure die forming into a purpose-built cross-sectional profile engineered to meet solar module frame performance requirements.
   • Steel coil, which is a flat-rolled product of general utility, is transformed through the roll forming process into a frame profile with a shaped cross-section designed and engineered to perform a specific structural function.

In both cases, the form and function of the material are fundamentally altered. The input material has indeterminate use; the output material has a specific commercial function as the side of a solar module frame. The cross section of each frame profile is designed and engineered to support the exterior of the solar module, prevent bending or twisting under wind load or snow load, protect the glass edge from physical impact, and facilitate secure attachment to racking systems. This is precisely the type of transformation that the FTA’s guidance identifies as constituting more than mere assembly.

3. Extrusion and roll forming require multi-million-dollar equipment, significant floor space, energy infrastructure, skilled operators, and custom die tooling. These are precisely the types of manufacturing activities the domestic content bonus credit was enacted to incentivize – operations that create jobs, require substantial domestic capital investment, and support a skilled domestic workforce.

Cutting to Length and Drilling Holes Are at Risk of Being Considered ‘Mere Assembly’

Solar project developers should be aware that there is significant risk that the processes of cutting frame profiles to length and drilling or punching holes, standing alone, will not be considered sufficient to constitute “production in the United States” for purposes of the domestic content bonus credit. The basis for this concern is outlined below.

1. Cutting to length and hole punching are not listed among the FTA’s enumerated processes constituting more than mere assembly. 
2. The FTA has directly determined that drilling holes constitutes mere assembly. In In re Milwaukee County Transit System (FTA 2010), the FTA found that collectively, drilling holes in a bus bumper, combining subcomponents of a bike rack system, and applying decals constituted mere assembly – not a manufacturing process. 
3. Cutting a frame profile to length and punching holes do not alter the cross-sectional design or fundamental function of the profile. The cross section defines the function of the profile – it is designed and engineered to support the solar module, prevent bending or twisting, protect the glass edge, and facilitate mounting. Once extrusion or roll forming creates that cross section, the profile’s sole future commercial function is for use as the side of a solar module frame. Cutting to a particular length and adding holes does not change that function.
4. Cutting and hole punching represent a small fraction of overall manufacturing and investment costs. 

Key Takeaways for Solar Project Developers

In light of the foregoing analysis, frame origin determinations remain an area of potential uncertainty for solar project developers. There are several areas of caution:

• Cutting and hole punching alone present risk. The legal authorities discussed above suggest that cutting to length and punching holes, without more, are at risk of being considered “mere assembly” and insufficient to establish domestic production.
• Certificates of origin merit closer review. Certificates that claim a frame was “manufactured in the United States” without identifying the underlying manufacturing processes performed in the United States are a potential trap. More detailed documentation may provide additional support for origin determinations.
• Tariff shift arguments remain unsettled. Some industry participants have argued that a tariff classification shift supports a US-origin determination, although tariff rules and the Buy America requirements serve different purposes.
• Projects near the domestic content threshold face increased exposure. If a frame is ultimately determined not to qualify as US-origin, the project’s domestic content percentage calculation could be affected — creating significant exposure if the domestic content of the overall investment is close to the statutory threshold.

Treasury and the IRS have not yet addressed solar module frame manufacturing processes directly, and future guidance may help clarify the applicable standard.