This week the wind and solar industry received some welcome news from the Internal Revenue Service (IRS). On May 27, the Treasury Department and IRS extended the federal tax incentives that apply to renewable energy projects which produce electricity from sources such as wind, solar, geothermal, biomass and other qualifying renewable sources.
Many renewable projects currently under construction have seen meaningful delays in their expected commercial operation dates due to COVID-19 related issues. These delays could have potentially reduced or eliminated their ability to receive either the renewable energy production tax credit (PTC) or investment tax credit (ITC).
For some projects that began in 2016 or 2017, this extension adds an extra year to the four year “Continuity Safe Harbor.” Additionally, the extension also provides a 3-1/2 month Safe Harbor for services or property paid for by the developer on or after September 16, 2019, and received by October 15, 2020.
Additional information can be found at the IRS website via the following link: https://www.irs.gov/newsroom/treasury-irs-provide-safe-harbor-for-taxpayers-that-develop-renewable-energy-projects