The Grid-Connected Solar PV Projects can Enjoy Tax Credit by 30% in United States

In the end of June, 2018, Internal Revenue Service (IRS) definitely declared when solar developer can be permitted to enjoy Investment Tax Credit (ITC) by 30% for their solar projects. The 30% Tax Credit would be applied up to the end of 2019, thereafter it would be gradually decreased till 4 years and reach 10% ultimately. Under the direction of new policy, basically only if solar developer start to establish solar projects before 31th, December, 2019 and complete to establish before the end of 2023, these projects have qualification to get Investment Tax Credit by 30%.

The policy has definitely explained what is “starting to establish”. One method is to show “actual working” in the installation site or in the factory which is manufacturing solar equipment for the project, because the solar equipment just can be manufactured only if the solar developer get the qualification for the project.

Another is that the developer afford total cost by 5% for the project. Usually, cost is not just calculated by money expenditure, developer must accept service or the delivery of equipment or ownership.

Internal Revenue Service (IRS) combines the policy of starting establishment for solar project development and the policy of tax credit which is from Wind Energy, to permit 5% for safe port rule or the inspection of manual labor.

According to the policy of safe port by 5%, the projects would have qualification to get all ITC only if solar developers can afford 5% of the project cost before 1th, January, 2020. According to the rule of actual working inspection, solar developers much definitely indicate the actual working of solar projects have started and continue to the project completing.

The rule of safe port by 5% also includes continuous requirement, but this can get through “to pay the extra cost which is in the energy property cost, to sign the contract which is relative with extra property or the working binding, to get necessary license or implementing” to realize. According to the memorandum which is published by BakerBotts, this is a great significant physical labor.
The company also said in the memorandum, “the continuous safe port would be specially good for the taxpayers who want to make the ITC be maximization.”

Although IRS didn’t definitely explain, it is really possible that solar developer can afford the cost for solar project, and provide all solar devices for the solar project, excepting for solar modules. In addition, most of Countries would impose tariff before 2021, to hand over solar modules by 2022, an astute solar developer still can enjoy full Tax Credit by 30%.

This IRS’ new policy would stimulate the development of solar PV industry in United States. The growth of solar development has slow down because of former 201 clause, now the solar development would recover in United States. IRS want to get through this rule to accelerate the solar PV installation in United States.

Bingsolar Power,         7th, July, 2018