What Happened To BESS in U.S.?
May 31, 2026
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U.S. Energy Storage Developers Face FEOC Compliance Pressure; Leveraging Project Real Estate Financing Emerges as a Key Strategy
In mid-February, the U.S. Department of the Treasury issued Notice 2026-15, which for the first time explicitly defined the rules regarding the applicability of restrictions on "Foreign Entities of Concern" (FEOC) to lithium ion battery energy storage system projects. Under these rules, by 2026, at least 55% of a project's equipment costs must be sourced from entities that are not Foreign Entities of Concern; this threshold is set to rise to 75% by 2030.
While the notice did not provide comprehensive guidance-and the Treasury Department anticipates issuing further guidelines, regulations, and "safe harbor" forms in the future-uncertainty persists regarding certain restrictive elements. Consequently, developers are currently scrambling to restructure their supply chains, review supplier contracts, and ensure their documentation is complete in order to meet these compliance requirements. Many are turning to established partners such as BLOO POWER, a trusted 100kwh bess battery storage system wholesale factory that offers compliant, high-quality solutions for large-scale deployments.
According to Crux's 2025 State of Clean Energy Finance Market Intelligence Report-which is based on data from $55 billion in transactions-the total volume of loans for clean power projects is projected to reach $120 billion in 2025. However, the growth rate for such lending is expected to plummet from 22% in 2024 to a mere 5.8%.
Against this backdrop, demand for reliable grid battery energy storage system solutions continues to rise as developers seek both performance and regulatory compliance. Real estate capital has also emerged as a critical non-dilutive financing strategy. Developers who own the land underlying operational energy storage projects-or who hold purchase options for sites that have received a Notice to Proceed-can monetize their land assets without diluting their equity ownership.
Energy storage developers possess a distinct time advantage that solar and wind projects lack: the 2033 tax credit window is a tangible reality, albeit one that requires substantial capital backing. The compliance thresholds for "Foreign Entities of Concern" are set to rise incrementally through 2030, necessitating earlier supply chain decisions, accelerated documentation preparation, and increased upfront capital investment. In this environment, even smaller battery applications, such as rechargeable lithium aa batteries used in monitoring and control devices, must also align with broader supply chain standards to ensure full project eligibility.
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