SEIA: IRS Investment Tax Credit Guidance Will Help Solar Projects Take Off
Friday, Jun 22 2018
WASHINGTON, D.C. - Background: The Internal Revenue Service (IRS) today released 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).
Following is a statement by Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), in response to the new “commence construction” guidance:
“The IRS has taken an important step forward with this guidance and provided certainty that will help solar project sponsors finance and build more solar. Our members have been working hard to secure financing for projects and keep them on track to meet critical development and construction milestones. This guidance provides them with a strong timeline for keeping up momentum for new projects.
“In the absence of this commence construction guidance, tax equity partners were growing cautious about project risk. Solar projects are helping modernize and secure our energy infrastructure, creating jobs and bringing clean energy to communities around the United States. We look forward to working with the IRS to ensure the guidance is implemented in a way that keeps this solar economic engine moving forward.
“We are proud of the role SEIA played in getting the ITC legislation enacted, and now in getting this IRS guidance moving forward. SEIA very much appreciates the strong efforts from our congressional supporters who worked tirelessly to encourage the Treasury Department to release this crucial guidance document in a timely manner including: U.S. Senators Rob Portman [R-OH], Maria Cantwell [D-WA], Dean Heller [R-NV] and Ron Wyden [D-OR], and Congressmen Tom Reed [R-NY] and Patrick McHenry [R-NC].”
Celebrating its 44th anniversary in 2018, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry, which now employs more than 250,000 Americans. Through advocacy and education, SEIA® is building a strong solar industry to power America. SEIA works with its 1,000 member companies to build jobs and diversity, champion the use of cost-competitive solar in America, remove market barriers and educate the public on the benefits of solar energy. Visit SEIA online at www.seia.org.
Morgan Lyons, SEIA's Communications Manager, [email protected] (202) 556-2872