On June 22, 2018, the Internal Revenue Service (the
"IRS") issued Notice
2018-59, which provides long-awaited guidance on when
construction of energy property will have begun for purposes of the
Investment Tax Credit ("ITC") under section 48 of the
Internal Revenue Code (the "Code").
The guidance is similar in many respects to the beginning of
construction guidance issued for wind facilities and other
facilities that are eligible for the PTC under section 45 of the
Code or the ITC in lieu of the PTC (the "Prior
Guidance"). Although the rules in Notice 2018-59 should be
familiar to those who have worked with the Prior Guidance, this
client alert covers the applicable rules in detail. Furthermore,
this client alert will focus on solar PV projects, though Notice
2018-59 also applies to solar hot water, fiber-optic solar,
geothermal, fuel cell, qualified microturbine, CHP, small wind, and
geothermal heat pump property.
