New IRS Safe Harbor Notice Provides Needed Relief and Clarity for Solar Companies
Tuesday, Jun 29 2021
WASHINGTON D.C. — Today the Internal Revenue Service (IRS) released a new notice that extends safe harbor for solar projects under the Section 48 Investment Tax Credit (ITC).
Notice 2021-41 extends the safe harbor rules under IRS Notice 2018-59 from four years to six years for projects that started construction from 2016-2019, and from four years to five years for projects that started construction during 2020.
The notice also provides a new choice to demonstrate continuous work, known as a continuity requirement, on a project, providing for the ability to utilize one of two standards, regardless of how an earlier decision was made on how to commence construction.
Following is statement from Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA) on this critical new notice:
“Many solar companies have faced significant disruptions to their project timelines due to COVID-19, and this new notice from the IRS will give them much-needed breathing room to complete these projects.
“Over the last year and a half, the pandemic disrupted supply chains, shipping and construction operations, permitting processes and financing timelines. Without clarity on safe harbor rules from the IRS, some of these solar projects, and the local economic benefits they bring, would not have made it across the finish line. Businesses now have the certainty they need to keep these projects moving forward, and we thank our federal leaders at the Treasury Department for making this decision.
“The solar industry is leading America’s economic recovery and is a critical part of the solution to climate change. As we continue to work with Congressional allies on strong federal policies that will grow the solar industry and meet our climate goals, solar companies are working every day to bring billions of dollars of investment and thousands of jobs to local communities. This meaningful IRS action will help this job creation continue.”
The Solar Energy Industries Association® (SEIA) is leading the transformation to a clean energy economy, creating the framework for solar to achieve 20% of U.S. electricity generation by 2030. SEIA works with its 1,000 member companies and other strategic partners to fight for policies that create jobs in every community and shape fair market rules that promote competition and the growth of reliable, low-cost solar power. Founded in 1974, SEIA is the national trade association for the solar and solar + storage industries, building a comprehensive vision for the Solar+ Decade through research, education and advocacy. Visit SEIA online at www.seia.org and follow @SEIA on Twitter, LinkedIn and Instagram.
Morgan Lyons, SEIA's Senior Communications Manager, email@example.com (202) 556-2872