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IRS Issues Updated Guidance Further Restricting Solar Tax Credits
Category: Internal Revenue Service (IRS)
Related Categories: Solar Tax Credits
The IRS issued updated guidance further restricting the safe harbor by also requiring solar projects to have begun construction by September 2, except for low-output (1.5MW or less) solar projects, which have until July 4, 2026. The safe harbor rule allowed new, qualifying wind and solar projects to receive the full 30% clean electricity production tax credit (PTC) or investment tax credit (ITC) if at least 5% of total facility costs were incurred by the end of the year. At that point, the PTC will end, and ITC will be reduced to 6%, per the “One Big Beautiful Bill Act.”
