3 days ago
I.R.S. Makes It Harder for Wind and Solar Projects to Claim Tax Breaks
The Internal Revenue Service on Friday issued new rules that would restrict the ability of wind and solar companies to claim federal tax breaks, a move that analysts said could threaten the viability of many renewable energy projects under development.
President Trump's giant domestic policy bill, which was signed into law on July 4, was already set to rapidly phase out lucrative tax credits for new wind and solar farms unless they began construction in the next 12 months. The new I.R.S. guidance would add further restrictions by tightening longstanding rules for what counts as the 'beginning of construction,' which will make it harder for many projects to qualify.
Previously, a wind or solar farm was said to have begun construction if the developer spent at least 5 percent of the project cost, which many companies did by purchasing electrical transformers or other large equipment ahead of time. The developer could then claim any tax breaks that were in effect that year, as long as they finished construction within the next four years.
The new I.R.S. guidance eliminates this so-called '5 percent safe harbor' rule for large wind and solar farms, although it keeps it in place for rooftop solar projects and other smaller solar installations.
Renewable energy industry groups criticized the move, which comes as the Trump administration has unleashed a barrage of new restrictions on federal permitting for wind and solar projects across the country.
'This is yet another act of energy subtraction from the Trump administration that will further delay the build-out of affordable, reliable power,' said Abigail Ross Hopper, chief executive of the Solar Energy Industries Association. 'American families and businesses will pay more for electricity as a result of this action, and China will continue to outpace us in the race for electricity to power A.I.'
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