Solar Energy and ITC: New IRS Guidance on Begin-Construction Requirement

Transferring Energy Property, Treatment of Multiple Energy Properties as Single Facility

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, September 13, 2018

Recorded event now available

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Program Materials

This CLE webinar will provide counsel to companies considering or involved in solar energy projects with guidance on the federal investment tax credits (ITC). The panel will discuss the new IRS guidance and offer their best practices for taking advantage of the tax credits as part of tax planning on solar energy projects.

Description

The IRS issued its guidance on when construction begins on energy facilities for purposes of the ITC. The new begin construction requirement applies to several types of energy property, including solar and fiber optic solar. This guidance is particularly beneficial to utility-scale solar developers faced with solar tariffs on imports.

The new guidance provides two methods of meeting the begin construction requirement—the physical-work test and the five percent safe-harbor test. The condition is satisfied under the physical-work test when physical work of a “significant nature” begins. Under the five percent safe-harbor test, the payment of five percent or more of the energy property’s cost meets the standard.

The IRS notice also provides guidance on transferring energy property and on the treatment of multiple energy properties as a single facility. It is critical for developers, investors and their counsel to understand the law and guidance regarding these credits to ensure that the credits will be available concerning their solar energy projects.

Listen as our authoritative panel of energy and tax professionals examines the benefits of the tax credits and discusses the new IRS guidance. The panel will offer insights into how solar project developers and investors can leverage the new IRS guidance to properly qualify their projects for the 30% ITC before the step down begins on Jan. 1, 2020.

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Outline

  1. Tests for meeting begin-construction requirement
    1. Physical-work test
    2. Five percent safe harbor test
    3. Additional practical steps for developers
  2. Transferring energy property and projects
  3. Treatment of multiple energy properties as a single facility
  4. Retrofitted projects

Benefits

The panel will review these and other critical issues:

  • How can the begin construction requirement be met under the physical work test? The five percent safe-harbor test?
  • What are the first steps for counsel seeking to take advantage of tax credits and incentives available to help finance solar energy projects?
  • How will the new IRS guidance help solar project developers and investors avoid solar tariffs?

Faculty

Marciano, John
John J. Marciano, III

Partner
Akin Gump Strauss Hauer & Feld

Mr. Marciano is a member of the firm’s Global Project Finance Group. He focuses on providing tax, legal and...  |  Read More

McCormick, Durham
Durham C. McCormick, Jr.

Partner
McGuireWoods

Mr. McCormick focuses his practice on tax structuring for renewable energy transactions, with a particular emphasis on...  |  Read More

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