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Truth to Power - Episode Special
On this special episode of #TruthtoPower, IntelStor's Founder & CEO, Philip Totaro shares an analysis of the proposed changes to the IRS rules for start of construction to qualify for tax credits in the USA.
The biggest change is that there are no more Safe Harbors after 2 September 2025. Project developers can still choose to start construction within the 4 year window allotted under the old IRS rules if they already have Safe Harbor equipment, but they have to maintain "Continuous Construction" (i.e. no stop/start).
For projects which have not already safe harbored, they must start construction by July 4th 2026 and maintain continuous physical construction activity until the project is commissioned by the end of 2027.
Even if you do have Safe Harbored equipment, it doesn’t guarantee that you qualify for tax credits if the county or township your project is in enacts a moratorium, so it's best to start construction work fast. More than 14.5 GW has already safe harbored under the existing IRS rules which are poised to change on September 2nd. The remaining 16.5 GW will need to sign safe harbor agreements before that date or risk exposure to moratoriums.
Other notable changes to the IRS rules around start of construction include this notion of a physical work requirement. Off-site physical work of a significant nature may include the manufacture of components, mounting equipment, or support structures. If wind turbine components and towers are assembled on-site from components that are manufactured off-site by a supplier, then the developer can claim start of construction if two conditions are met.
All in all, this could have been a lot worse, and while biggest impact is the elimination of the elimination of the four-year window under the safe harbor, the net result will actually spur US based component manufacturing.
Have a listen today, and get in touch with your best questions about the renewable energy market in the USA, or any other country around the world.
This show examines data driven insights for the energy sector, with a focus on renewables. To subscribe to IntelStor Research Notes and get early access to our latest content as well as these Truth to Power weekly editorials, visit https://lnkd.in/grfixJn
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By IntelStorOn this special episode of #TruthtoPower, IntelStor's Founder & CEO, Philip Totaro shares an analysis of the proposed changes to the IRS rules for start of construction to qualify for tax credits in the USA.
The biggest change is that there are no more Safe Harbors after 2 September 2025. Project developers can still choose to start construction within the 4 year window allotted under the old IRS rules if they already have Safe Harbor equipment, but they have to maintain "Continuous Construction" (i.e. no stop/start).
For projects which have not already safe harbored, they must start construction by July 4th 2026 and maintain continuous physical construction activity until the project is commissioned by the end of 2027.
Even if you do have Safe Harbored equipment, it doesn’t guarantee that you qualify for tax credits if the county or township your project is in enacts a moratorium, so it's best to start construction work fast. More than 14.5 GW has already safe harbored under the existing IRS rules which are poised to change on September 2nd. The remaining 16.5 GW will need to sign safe harbor agreements before that date or risk exposure to moratoriums.
Other notable changes to the IRS rules around start of construction include this notion of a physical work requirement. Off-site physical work of a significant nature may include the manufacture of components, mounting equipment, or support structures. If wind turbine components and towers are assembled on-site from components that are manufactured off-site by a supplier, then the developer can claim start of construction if two conditions are met.
All in all, this could have been a lot worse, and while biggest impact is the elimination of the elimination of the four-year window under the safe harbor, the net result will actually spur US based component manufacturing.
Have a listen today, and get in touch with your best questions about the renewable energy market in the USA, or any other country around the world.
This show examines data driven insights for the energy sector, with a focus on renewables. To subscribe to IntelStor Research Notes and get early access to our latest content as well as these Truth to Power weekly editorials, visit https://lnkd.in/grfixJn