IRS Investment Tax Credit will be a great boost to U.S. solar projects

Ruling on U.S. credit is an unexpected gift to solar developers


The Internal Revenue Service (IRS) released a guidance establishing when construction starts for solar projects under tax law, allowing developers to invest with confidence in new solar projects.

The guidance, Notice 2018-59, provides two methods to establish when construction of a solar facility starts to qualify for the solar investment tax credit (ITC):

(1) starting physical work of a significant nature or

(2) meeting the ‘five percent safe harbor test’ (i.e., paying or incurring five percent or more of the total cost of the facility in the year that construction begins).

Under this guidance, developers can claim a 30 percent tax credit for solar projects as long as they prove they’ve started construction by the end of 2019.

That means breaking ground or investing at least 5 percent of the total expected costs of the installation, and they have until the end of 2023 to complete the power plants.

More Stories From Around the Web:

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Posts