June 18, 2020
COVID-19 has massively impacted people from all walks of life and will have a huge knock-on effect for a wide range of industries. Unfortunately, the renewable energy sector is no exception and we have already seen the impact on the solar industry across the United States.
However, there has been some good news. Notice 2020-41 from the IRS provides some relief when it comes to renewable energy projects. Essentially, Notice 2020-41 allows renewable energy developers additional time for the completion of projects, while also easing the technical requirements associated with the three-and-a-half month rule.
Below, you’ll find some of the key points of Notice 2020-41 and what this means for the renewable energy sector as it begins to recover from the impact of COVID-19.
For developers who began construction in 2016/2017, they now have a five-year period to complete these projects and qualify for tax credits under safe harbor.
For the wind sector, the value of projects which began construction in 2016/2017 has been enhanced. This has been achieved by allowing developers/investors more time to complete these projects and qualify for tax credits which are gradually being phased out.
For developers who paid for equipment on/after September 16, 2019 and who receive that equipment by October 15, 2020, it will be understood that they would have reasonably expected to receive the equipment within three-and-a-half months for the purposes of beginning construction on a renewable energy project.
The full IRS notice is available to read here.
If you’re interested in developing a solar energy project, residential or commercial, get in touch today. Send us an email, or call at 212.389.9215 to get started.
YSG Solar is a project development vehicle responsible for commoditizing energy infrastructure projects. We work with long-term owners and operators to provide clean energy assets with stable, predictable cash flows. YSG's market focus is distributed generation and utility-scale projects located within North America.
Sources:
https://www.irs.gov/pub/irs-drop/n-20-41.pdf
https://www.lexology.com/library/detail.aspx?g=db82fd18-825a-4e69-affb-a25bee3c183d