Got ITCs? How To Start Construction On Your Solar Project (Pre-IRS Guidance)

Solar developers are getting antsy about what is needed to show that they started construction on their 2020 (or later) projects by the end of 2019.

The answer is not clear in the absence of solar-specific guidance from the IRS. That said, there is a large amount of legislative history and IRS guidance in similar contexts (such as the old solar tax credit from 1978 and the wind production tax credit).

This article attempts to come up with some practical guidelines for planning in advance of the release of solar-specific IRS guidance (which we understand is expected to be issued by this summer).

Background

Before 2015, the value of solar tax credits was adjusted based on the date that the project was placed in service. If a project was placed in service before 2017, it qualified for a 30 percent tax credit. If it was placed in service in 2017 or later, the credit was only 10 percent. Congress adopted a new framework in late 2015 that shifted the focus of the