On August 15, the Dept. of the Treasury released new guidance associated to secure harboring photo voltaic initiatives beneath the ITC in response to a July executive order from President Trump. Safe harboring permits corporations to display a good-faith effort at beginning a photo voltaic challenge to safe the relevant tax credit in place that 12 months.
Treasury secure harbor modifications beginning 9/2/2025
- Initiatives >1.5 MW should use Bodily Work Check
- Bodily Work Check is narrowed and doesn’t embrace “preliminary actions”
- Initiatives utilizing Bodily Work Check should preserve “steady program of building”
- Initiatives <1.5 MW can nonetheless use 5 P.c Protected Harbor
- All initiatives nonetheless have 4 years to be positioned in service beneath Continuity Protected Harbor
The brand new steerage requires initiatives bigger than 1.5 MW to make use of the Bodily Work Check to secure harbor the ITC — the strategy proving vital bodily labor has begun on a web site. Massive initiatives can not use the 5 P.c Protected Harbor — the strategy proving vital prices have been incurred for the challenge. The steerage additionally narrows the Bodily Work Check to “the set up of racks or different buildings to affix photovoltaic (PV) panels, collectors or photo voltaic cells to a web site.” It doesn’t embrace “preliminary actions” like grading the land, conducting research or clearing a web site. The steerage additionally requires initiatives utilizing the Bodily Work Check to “preserve a steady program of building,” the place the “bodily work carried out is of a big nature.”
The steerage didn’t increase the proportion required for the 5 P.c Protected Harbor, which, because the identify implies, stays at 5%. It additionally didn’t change the period of time builders have to put a safe-harbored challenge in service, whether or not it’s utilizing the Bodily Work Check or 5 P.c Protected Harbor. That Continuity Protected Harbor time interval continues to be set at 4 years.
The brand new guidelines take impact on September 2, 2025, and aren’t retroactive.
Photo voltaic business teams spoke out in opposition to the modifications, however Roth Capital Companions mentioned the steerage was “considerably higher than anticipated.”
“The Treasury Division’s new steerage to additional limit vitality tax credit is a part of an unprecedented facet deal the administration made with anti-clean vitality ideologues to undermine Congress and additional hurt America’s photo voltaic business,” mentioned Abigail Ross Hopper, president and CEO of the SEIA. “It is a blatant rejection of what Congress handed in HR 1, and it threatens 1000’s of small companies throughout the nation which can be the spine of our clear vitality financial system.”
