Overview

• On August 15, Treasury required projects to show physical work of a significant nature on-site or through binding off‑site manufacturing, ending reliance on planning, purchase orders or financing to establish construction start.
• The guidance eliminates the 5% spend safe harbor for all wind and most solar projects, preserving it only for solar facilities of 1.5 MW or smaller.
• Projects that establish start of construction receive a four‑year placed‑in‑service safe harbor to 2030, with extensions beyond that requiring continuous actual construction rather than continuous efforts.
• Under the OBBBA, wind and solar must begin construction by July 2, 2026 or be placed in service by December 31, 2027 to qualify for the tech‑neutral ITC or PTC.
• FEOC rules now restrict credits based on component and mineral origin, with non‑FEOC thresholds for solar at 40% in 2026 rising to 60% after 2029 and for storage at 55% rising to 75%, IRS calculation tables expected in late 2026, and a 20% penalty for miscalculations.