Official Tax Credit Statement
FranklinWH Product Tax Credit Eligibility
The Legislative Context
The One Big Beautiful Bill Act (H.R. 1, 119th Congress) (OBBBA) introduces a new eligibility framework governing which battery energy storage systems may be eligible for federal tax credits under Sections 48E and 45X of the Internal Revenue Code. For projects commencing construction after December 31, 2025, this framework evaluates whether manufacturers and key system components have meaningful ties to Prohibited Foreign Entities (PFEs), which is also known as “FEOC” and defined broadly as individuals and organizations operating under the ownership, control, or direction of the governments of China, Russia, Iran, or North Korea (each a “Covered Nation”).
FranklinWH's Corporate Standing
FranklinWH is not a PFE. This determination reflects a deliberate and thoroughly documented corporate restructuring executed under the counsel of preeminent U.S. law firms with deep expertise in tax, corporate governance and compliance. FranklinWH’s ownership architecture, decision-making authority, and operational independence have each been structured and verified to fall entirely outside the PFE definition as prescribed by the OBBBA.
What Makes FranklinWH Products Eligible for 48E
Beyond corporate standing, eligibility under IRS Notice 2026-15 turns on the manufacturing of key components and the resulting Material Assistance Cost Ratio (MACR). FranklinWH has mapped every relevant element of its supply chain against the OBBBA’s component-level standards, using the Identification Safe Harbor included in IRS Notice 2026-15 together with the Updated Table for Battery Energy Storage Systems in IRS Notice 2025-08. The results are clear - the following key components are manufactured and supplied by non-PFE U.S. domestic manufacturers:
- Battery Pack/Module
- Battery Management System
- Packaging
- Battery Container/ Housing
- Enclosure
- Thermal Management System for Battery Container/Housing
This U.S.-anchored component structure means FranklinWH products satisfy both the "material assistance cost ratio" requirement and the "domestic content" requirement set forth under the OBBBA --- two distinct and independently meaningful thresholds for Section 48E tax credit qualification.
Eligible Product SKUs
The following FranklinWH product SKUs* meet the component-level requirements described above and qualify for Section 48E tax credit consideration when deployed in eligible systems:
The SKUs listed above are not exhaustive.
Additional SKUs, including those customized for specific projects,
also qualify.
An Ongoing Commitment
The OBBBA’s MACR thresholds are designed to rise over time, progressively deepening domestic supply chain integration. FranklinWH treats this not as a compliance burden but as a product strategy. We are actively expanding our U.S. manufacturing partnerships and deepening domestic sourcing to stay ahead of each successive threshold, ensuring our systems remain 48E eligible as the landscape evolves, and that the projects our partners build today continue to perform financially for the long term.
A Note on Future Guidance
Tax law, particularly at the intersection of energy incentives, foreign entity regulation, and domestic content requirements, is inherently nuanced and continues to develop through IRS guidance and regulatory action. The statements above reflect FranklinWH’s current understanding and supply chain configuration as of the date noted. They do not constitute tax, legal, or financial advice. Project developers and investment partners should engage qualified counsel to assess how these provisions apply to their specific circumstances.
FranklinWH will update this statement as material changes arise. For product-specific inquiries, please contact your FranklinWH representative.
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