The safe harbor provision allows commercial solar projects to take advantage of 2019’s full 30% tax credit, even if their system can’t be completed until the following year(s). Before the Safe Harbor provision was established, solar energy systems had to be installed, interconnected to the grid, approved, and in operation before they qualified for the ITC. In June 2018, the Internal Revenue Service (IRS) issued Notice 2018-59, a framework that has since become informally known as the solar safe harbor agreement. The definition of what beginning construction means is at the heart of safe harbor and is what a prospective solar buyer should be aware of in considering a safe harbor strategy. Treasury confirms safe harbor provisions for solar ITC will be extended until Oct. 15 By Kelsey Misbrener | May 28, 2020 New guidance from the Treasury Department confirms that the safe harbor provisions for the solar Investment Tax Credit will be extended until October 15, 2020, as a result of the pandemic, giving solar companies more time to qualify for the important credit. EnergySage estimated the average benefit from the ITC at $5,000. On January 1st, 2020 the ITC is dropping to 26%. If, for example, your sale also includes a site lease and a PPA, the purchaser would receive the benefit of the safe harbor. For homeowners, each year you wait you’re losing out on substantial savings.Businesses, however, have a little more leeway, thanks to the safe harbor provision. Safe Harbor is a process that ensures the 30% rate established in 2019 can be extended throughout the entire solar installation process. To receive Safe Harbor status, a project must be completed by 2023. Finding Safe Harbor. The IRS has established a provision to the ITC tax law called safe harbor, which allows customers to preserve the tax credit of the current year by beginning construction on a solar project. The ITC allows you to recoup 30% of your project cost from your federal taxes, with no cap.
Solar ITC Safe Harbor To Be Extended May 8, 2020 Solar in South Florida The U.S. Department of the Treasury is poised to adjust the current safe-harbor guidelines for both the production tax credit (PTC) and investment tax credit (ITC), providing needed wiggle room and predictability for wind and solar projects that have been stalled in the face of the coronavirus pandemic.
For these energy properties, regardless of when construction begins, the projects must be placed in service before January 1, 2024. Solar ITC Safe Harbor To Be Extended . The amendments also phase out the ITC for fiber -optic solar, qualified fuel cell, and qualified small wind energy property over five years. The provision does not apply to only 2019.
Michael Bates-May 8, 2020. By mtvSolar | July 23, 2019 | Category mtvSolar. Policy always has an impact on the return on investment of particular energy sources, and solar energy is no exception. As a general finance term, a “Safe Harbor” is a legal provision to reduce or eliminate legal or regulatory liability in certain situations as long as certain conditions are met. By locking in the 30% rate, commercial and utility solar installation projects stand to save hundreds of thousands in federal tax credits in the coming years. To Safe Harbor or Not to Safe Harbor, That Is the Question For many U.S. solar developers, the decision to safe-harbor projects for the ITC is not as clear-cut as it first seems. Written by. On Wednesday, May 27, the U.S. treasury department issued Notice 2020-41 related to the safe harbor deadline for renewable energy projects that began construction in 2016 or 2017. The ITC percentage for a solar project is determined based on the year in which construction of the project begins, provided the solar project is also placed in service before January 1, 2024, as follows: (i) before January 1, 2020, 30%, (ii) in 2020, 26%, (iii) in 2021, 22% and (iv) any time thereafter (regardless of the year in which the solar project is placed in service), 10%. Solar ITC Safe Harbor To Be Extended bestsolar May 8, 2020 The U.S. Department of the Treasury is poised to adjust the current safe-harbor guidelines for both the production tax credit (PTC) and investment tax credit (ITC), providing needed wiggle room and predictability for wind and solar projects that have been stalled in the face of the coronavirus pandemic. A … There are two methods to pre-qualify for the ITC: 1) safe harbor equipment, or 2) continuous, custom site work construction. 0. Installing a grid-tied… GameChange Solar Unveils ITC Safe Harbor Strategy May 28, 2019 NEW YORK, NEW YORK – May 28, 2019 – GameChange Solar today announced the introduction of an innovative safe harbor strategy which allows customers to lock in the ITC tax credit for projects to be built in the coming years. Based on ICF’s experience with wind, the safe harbor equipment option is a popular choice because the requirements are generally understood and relatively simple. To those solar industry veterans who recall the last time we had a Safe Harbor situation, in 2012, check yourselves from thinking this is déjà vu all over again and want to run from it. The IRS has established a provision to the ITC tax law called safe harbor, which allows customers to preserve the tax credit of the current year by beginning construction on a solar project. What you need to know about the safe harbor option .