Question marks and strategies
Those hard dates suggest that claiming the ITC and PTC is a black-and-white matter. It is not. Definitions for key terms such as “placed in service” and “begin construction” leave room for interpretation. For example, The Internal Revenue Service (IRS) lists five factors it considers when determining whether a project is in service, including whether it has secured the necessary permits and licenses, completed critical preoperation tests, and synchronized with the power grid.
Because the IRS evaluates those factors case by case, Cooper said, a project doesn’t necessarily have to satisfy all five. That makes it hard to be certain when a project meets the criteria. Similarly, beginning construction doesn’t necessarily mean a project had modules installed by July 4.
Under IRS rules, one way to begin construction is to perform significant physical work, either on the project site or away from it. Another way to qualify is to pay or incur at least 5 percent of total project costs, often by purchasing modules or other equipment. And a developer that missed the July 4 deadline on paper may not be out of luck. Cooper said that reviewing what was done before that date, such as securing smaller equipment contracts, tracking internal costs, or starting early site work, may support a claim that construction had already begun.
Prioritizing your portfolio
For projects that didn’t begin construction by July 4, the end-of-2027 deadline forces hard choices. Rohit Patil, senior director of design engineering at New Leaf Energy, said developers should review their entire portfolio to identify which projects have a realistic path to being placed in service by then and which are worth accelerating.
“The placed-in-service deadline doesn’t necessarily turn a marginal project into a good project,” he said. “Projects with borderline economics are particularly vulnerable because they have little room to absorb any additional costs and delays.”
For many developers, the key factor that will determine whether a project can meet the in-service deadline is the utility interconnection timeline. Kleber Facchini, senior director of CC&I products and applications at SolarEdge Technologies, said customers that build both ground-mounted and rooftop systems are shifting toward rooftop projects. Those connect to the distribution grid near cities and tend to interconnect faster than ground-mounted projects, which are often sited in rural areas with weaker grids.
Purchasing with purpose
Equipment decisions also shape whether a project keeps its credits in two ways. The first is timing: A project can’t be placed in service by the end of 2027 without all its equipment on site.
That means ordering equipment now. Facchini said transformers have especially long lead times and urged developers to procure modules, racking, and trackers as well. Another reason to secure modules quickly: New Section 232 tariffs on imported polysilicon and solar products, including modules, take effect on December 4. “Any sort of modules that land after that date will cost you more,” said Ravi Manghani, senior director of strategic sourcing at Anza Renewables.
The second is compliance with the OBBBA’s foreign entity of concern (FEOC) rules, which can disqualify a project even if it is on schedule. The rules include denying credits to projects with too much ownership, debt, or control tied to China, Russia, North Korea, or Iran. For projects that began construction in 2026 or later, FEOC rules also cap the share of equipment that can come from manufacturers tied to those countries.
Elections matter
The underlying assumption behind the IRA was that the law would endure because many of its benefits were directed toward Republican constituencies. That turned out not to be true for wind and solar, and the OBBBA cut short the long-term support the IRA promised.
One lesson from both the rollback of the IRA and past tax credit challenges is that federal energy tax policy is rarely a static and settled matter. “Folks who’ve been in the industry long enough know that an ITC cliff is not necessarily an ITC cliff,” Manghani said. Though not exactly a strategy for securing tax credits, it is a reminder that this year’s midterms and the 2028 presidential election could fundamentally reshape the federal incentive landscape yet again.
