US Treasury says it may modify tax credit rules for wind and solar energy –

Last week the senate.gov
website published a
letter indicating that the Treasury Department “plans to modify the
relevant rules in the near future” for solar and wind energy tax credits. The
letter was sent in response to a request made by U.S. Senator from Iowa Charles
“Chuck” Grassley for an extension of the safe harbor deadline for wind and
solar energy to receive tax credits.

Under the current rules, wind
energy projects that had “begun construction” in 2016 had until the end of 2020
to start operation in order to take advantage of the full 2.5 cents per kWh production
tax credit (PTC). The rules for beginning construction said that a developer
had to invest at least 5% into the project and show continuous construction
activities and that the project must be placed in service within four years. If
they did that, the project was considered in safe harbor.

Similar rules exist for solar
project developers that wish to take the full investment tax credit (ITC) of
30% of the project cost.

Read
more: Understanding ‘safe harbor’ for extending your 30 percent solar ITC
qualification

With the Covid-19 pandemic,
project developers have experienced supply chain disruptions as well as interruptions
in construction due to stay-at-home orders, which have put their ability to collect
the PTC and ITC in jeopardy.

Gregory Wetstone, President and
CEO of the American Council on Renewable Energy (ACORE), said that he is encouraged
by the letter.

 “Extending these safe harbor deadlines would
be immensely helpful as the renewable sector has been hit hard these last
couple of months by supply chain disruptions, shelter-in-place orders and other
significant pandemic-related delays,” he said in a statement.

“We look forward to further
detail on this critical issue and extend our appreciation to the Treasury
Department for this important step, which will help the renewable sector
continue as a key economic driver through this downturn, and an effective
climate solution over the long haul,” he added.