Solar Power

IRS Issues Investment Tax Credit Guidance for Solar Projects

On Friday, June 22, 2018, the Internal Revenue Service issued guidance clarifying when construction commences for purposes of qualifying for the investment tax credit (“ITC”) for solar photovoltaic facilities. The ITC is a dollar-for-dollar reduction in federal income tax due by the taxpayer equal to a specified percentage of the eligible basis (generally the cost) of an energy project originally placed in service by the taxpayer.  The percentage of the ITC depends on when construction begins on the eligible project, and hence the guidance received by the IRS is critical.

As a result of the PATH Act, the ITC percentage for solar facilities, which traditionally has been 30 percent of the eligible basis, phases out as follows:

  • 30% for projects that begin construction by the end of 2019
  • 26% for projects that begin construction in 2020
  • 22% for projects that begin construction in 2021
  • 10% for projects that begin construction in 2022 or after

The

Welcome to the Energy Infrastructure Blog!

Welcome to the Energy Infrastructure Blog – EI Blog, for short – Pierce Atwood’s new blog that will provide information and analysis on the key policy and legal issues relevant to energy infrastructure policy, development, and finance in New England and beyond.  Pierce Atwood has assembled a team of legal practitioners from diverse practice areas who focus on all aspects of developing, buying, and selling energy infrastructure projects, and who also recognize that understanding both the fundamentals and trends in this ever-changing area is essential for developers, investors, policymakers, and interested members of the public.  We look forward to sharing our insights with you. 

Why an energy infrastructure blog – and why now?

We may not always think about it, but the mixed generation fleets, as well as the electricity transmission and distribution network that “keep the lights on” throughout New England are integral parts of everyone’s everyday lives.  Policymakers, lawyers, and