July 14, 2020

Volume X, Number 196

July 14, 2020

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July 13, 2020

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Extension to Tax Credits Provides Relief to the Renewable Energy Industry

The United States Treasury Department formally extended the eligibility deadlines for Production Tax Credits (PTC) and Investment Tax Credits (ITC) in connection with renewable energy facilities. The extensions are a welcomed relief for solar, wind, and other renewable energy projects navigating the uncertainties of the COVID-19 pandemic. The extensions were announced in Notice 20-41, issued May 27, 2020, and offer the following guidance:

  • Renewable energy facilities relying on the Continuity Safe Harbor will now have five years (previously four) to complete projects that commenced in 2016 and 2017 while maintaining PTC and ITC eligibility

  • Developers and investors using the Five Percent Safe Harbor retain their eligibility so long as the taxpayer (i) invested 5% of project costs by December 31, 2019, (ii) reasonably expected the delivery of equipment intended to satisfy the safe harbor within 3 ½ months after the date of payment, and (iii) received the qualifying equipment by October 15, 2020 for equipment paid for on or after September 16, 2019. Notice 20-41 reasons that the taxpayer had a reasonable expectation that the equipment purchased would be received within the 3 ½ month safe harbor and therefore extends the safe harbor qualifying date so long as the qualifying equipment is received by October 15, 2020.

While this is good news for the renewable industry, developers and investors will want to be diligent and mindful of how these extensions may impact any investment credit recapture penalties due to a change in ownership, financial restructuring, or default under any applicable development contracts.

© 2020 SHERIN AND LODGEN LLPNational Law Review, Volume X, Number 154

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About this Author

Tanya Larrabee Environmental & Renewable Energy Attorney Sherin & Lodgen Law Firm
Associate

Tanya M. Larrabee represents renewable energy clients in the acquisition, development and financing of solar, wind and energy storage projects, including advising on state incentive programs.

Prior to joining Sherin and Lodgen, Tanya served as Legal Counsel at the Massachusetts Department of Energy Resources (DOER) where she represented and executed DOER’s legal and policy strategy in state and federal administrative proceedings including §83C offshore wind and §83D clean energy procurements, rate case proceedings, storage proceedings...

617-646-2051
Beth A. Goldstein  Partner Renewable Energy Chair
Partner

Beth A. Goldstein is a seasoned real estate attorney with experience representing buyers, sellers, developers and lenders in the sale, acquisition, financing, development and leasing of commercial real estate throughout the country.

As a partner in the firm’s Real Estate Department and chair of its Renewable Energy Practice Group, Beth’s clients are typically engaged in complex financing transactions including construction and permanent financing of solar facilities, New Markets, Historic and Low Income Tax Credit financing, and hotel development. Her leasing practice includes landlord and tenant representation in the leasing of industrial, retail, restaurant, and office space.

617-646-2050