Overview

• Notice 2025-42 establishes new construction rules for wind and solar projects that begin on or after Sept. 2, 2025.
• The 5% safe harbor has been eliminated for all but small solar installations of 1.5 megawatts or less.
• The Physical Work Test and a four-year continuity safe harbor remain, but qualifying on-site and off-site work has been narrowed to exclude permitting, design and inventory activities.
• Industry groups warn the tighter standards could delay or cancel thousands of projects and endanger up to 60 GW of planned solar capacity by 2030.
• Senate Republicans have placed holds on Treasury nominees and are preparing legal and legislative challenges to contest the guidance.