Earlier this year, the Internal Revenue Service (the
"IRS") published Notice 2013-29, providing guidance on
what it means to "begin construction" for purposes of the
recent extension of the 2.3 cent-per-kilowatt-hour production tax
credit (the "PTC") and the 30% investment tax credit (the
"ITC") for qualifying wind and certain other renewable
energy facilities (excluding solar) the construction of which
begins before January 1, 2014.
Under Notice 2013-29, there are two alternative methods by which
a taxpayer can demonstrate that construction has begun before
January 1, 2014: (1) by beginning physical work of a significant
nature before January 1, 2014 (the "physical work test")
or (2) by paying or incurring at least 5% of the total cost of the
facility before January 1, 2014 (the "5% safe harbor").
Among other requirements, the physical work test requires that the
taxpayer maintain a continuous program of construction and the 5%
safe harbor requires that the taxpayer
