IRS Releases "Start Construction" Guidance For Renewable Energy Facilities

Long-awaited guidance regarding eligibility for production or investment tax credits largely tracks guidance under the Section 1603 cash grant program.

On April 15, the Internal Revenue Service (IRS) released Notice 2013-29 (Notice),¹ which provides taxpayers with guidance as to when construction will be deemed to have "started" for certain renewable energy facilities eligible for the production tax credit (PTC) or investment tax credit (ITC). In addition to these guidelines, the Notice provides a "safe harbor" that taxpayers may seek to fall within to obtain additional assurance of their eligibility for the PTC or ITC. Although the Notice closely tracks the Section 1603 start construction rules, developers of and investors in such renewable energy projects should be mindful of the slightly different requirements outlined below, particularly with respect to rules concerning "continuous construction," to ensure that project construction is deemed to have "started"