In a letter to Assistant Treasury Secretary David Kautter, two U.S. senators requested the IRS issue guidance on what “beginning of construction” means for organizations pursuing an income tax credit for solar construction. The IRS complied, issuing the long-awaited clarification of an IRS policy that comprehensively defines when solar construction projects are acknowledged to begin. This guidance comes two years after the IRS clarified similar guidance for wind power sites.
The Jun. 7 letter from Senators. Maria Cantwell, D-Wash., and Dean Heller, R-Nev., makes a bipartisan appeal for the Treasury Department to clarify the “beginning of construction” language for properties pursuing a credit. The clarification request extends from the wind and solar tax credits guaranteed by the 2016 Consolidated Appropriations Act.
Following the passage of the bill in December 2015, the IRS issued Notice 2016-31, defining the evaluative standards for when wind, hydropower, geothermal and biomass trash facility projects are understood to “begin construction” but had not yet issued similar guidance for projects using solar energy. “The need for certainty is particularly important in the case of utility-scale projects, which, given their scale and cost, have significantly longer planning horizons,” Sens. Cantwell and Heller wrote.