Using the Solar ITC for Business Investments

Battery Projects Are Safe.  Solar? You Need a Plan. The new OBBBA law brings big changes to solar tax credit eligibility—and you’ll need a smart strategy to get the most out of your solar goals. Key takeaways: • Battery energy storage projects are not affected; the ITC remains intact. • ITC ends for solar projects not placed in service by Dec 31, 2027—but only if construction starts after July 4, 2026. • Projects that start during the next 12 months have four years to be placed in service and receive the ITC. • “Placed in service” means a project is ready to operate. Utility interconnection is not required. • MACRS depreciation for solar energy property is eliminated but is replaced with permanent 100% bonus depreciation. • The IRC §48E Investment Tax Credit (ITC) remains intact for third-party leased commercial solar PV energy property. • New rules prohibit solar tax credit eligibility if “material assistance” is provided by a Chinese-owned entity, for projects that start construction after December 31, 2025. • Any new IRS guidance on the start of construction safe harbor, compelled by a White House executive order, is not likely to survive legal challenge if it adversely changes previously issued guidance. What to do now: • To preserve ITC eligibility, contract and spend at least 5% of eligible project costs ASAP. • Begin soft-cost activities like engineering or permitting. This strategy protects your project from legal and tax risk while preserving key incentives. Read the full breakdown here: https://lnkd.in/eV53tTug #solar #energystorage #taxcredits #cleanenergy #commercialsolar #renewables #projectdevelopment #energystrategy

Today (Sept 2nd, 2025) is a defining day in the development of wind and solar projects in the USA. The One Big Beautiful Bill Act (OBBBA) counters the previous support for solar, wind and storage developers provided by the Inflation Reduction Act (IRA). 🔘 Accelerates tax credit sunsets 🔘 Tightens beginning of construction (BOC) rules; and, 🔘 Supply-chain rules From September, 2nd, to be eligible for federal tax credits, a developer: ❌ can no longer demonstrate BOC by deploying 5% of the projects allocated capital or completing at least 5% of the physical site construction. ✅ must show on-site physical progress of significant nature to qualify (e.g., foundation excavation, rack installation). ✅ projects continue benefiting from the four-year Continuity Safe Harbor meaning they have four years to be in service. After July 5th 2026, the four-year buffer goes away, and all projects must be operational by the end of 2027. Decision dichotomy: 1) If a project misses BOC eligibility, it loses access to the tax credits. This makes the cheapest supplier the default choice. 2) If a project meets the BOC requirements, the final procurement decision should be evaluated as a tradeoff between cost premium and ITC impact. So what should Developers do? ▶️ Accelerate BOC milestones for solar and wind before July 2026 to lock in Continuity Safe Harbor. ▶️ Estimate non-Prohibited Foreign Entity supplier switching cost impact on CapEx to determine whether Investment Tax Credit offsets justify higher CapEx: At 30% ITC, the threshold is at 42.9%. At 50% ITC, the threshold is at 100%. ▶️ If procuring from non-PFE suppliers is determined to be more economically appealing, diversify supply chains by securing non-PFE suppliers early to avoid bottlenecks. ▶️ Consider reallocating capital toward storage where timelines and credit certainty remain strongest. Read the full article on the Modo Energy Terminal and sign up to our Newsletter to get this information directly to your inbox.

🚨 The U.S. House has officially passed the much-anticipated “Big Beautiful Bill,” and it’s now on President Trump’s desk for signature—likely today. After months of back-and-forth, the final version brings long-awaited certainty and a manageable timeline for commercial solar, if executed right. Here’s what’s in the bill right now: ✅ Projects that begin construction within 12 months of enactment will still qualify for the full 30% Investment Tax Credit (ITC) under current rules. ⚠️ Projects that start are placed in service by Dec 31, 2027, also access the full 30% ITC. 🏗️ The domestic content bonus jumps to 45% immediately, with scheduled increases to follow. 🔁 Transferability rules remain unchanged—a key win for project finance and tax equity markets. 📅 The clock is now ticking. This bill reshapes timelines across the solar industry. If you're working on commercial solar or clean energy deployment, now is the time to reassess your strategy.