"With this notice, IRS sent a strong signal to investors while giving developers clear criteria on par with other renewable technologies," Liam Donovan, a principal at the law firm Bracewell LLP, told Utility Dive via email. The guidance has been received favorably as it assures the entire solar supply chain, according to Dan Whitten, vice president of communications at the Solar Energy Industries Association (SEIA). "If you're making manufacturing plans, now you know what the policy's going to be going forward. The developers are now cleared up on this," Whitten told Utility Dive. Developers breaking ground or making the 5% investment in the installation by 2020 have until the end of 2023 to bring the project online in order to qualify for the highest tax incentive (30% ITC). According to a Credit Suisse Group AG analyst note, this is particularly useful for developers that are affected by the solar tariffs imposed by the Trump administration, intended to stimulate domestic solar manufacturing. "The news is positive for utility scale solar developers who can now avoid solar tariffs imposed on imports through 2021, procure a majority of their solar panels in later years, and still qualify for the higher tax credits," analysts at Credit Suisse Group AG wrote, according to Bloomberg. SOURCE: IRS Notice 2018-59 There are too many factors to estimate if the uncertainty of the guidance led to curtailment of solar development, Whitten said. "In the absence of this commence construction guidance, tax equity partners were growing cautious about project risk," SEIA CEO Abigail Ross Hopper, said in a statement. In March, the IRS released a private letter ruling that a residential energy storage facility may qualify for the 30% solar ITC if it is charged completely by an onsite solar array. The ruling only applied to the undisclosed case addressed in the private letter, but it indicated the agency's views on residential storage eligibility for the credit.
IRS ( IRS ) has issued new tax credit guidance for the US solar industry, which establishes that developers will be able to claim a 30% investment tax credit on solar projects as long as the project begins by 1 January 2020 . To be eligible, developers must have invested a minimum of 30% of the total expected installation cost of a project by 1 January 2020 . The move has been welcomed as it clarifies previous guidance and offers a boost to an industry affected by Chinese tariffs.