Last Updated on August 18, 2025 by Anne Brock
Clean Energy Tax Credit Opportunities Remain
New Federal Guidance on Clean Energy Tax Credits
Clean energy tax credits have been a significant benefit for business owners, and they STILL ARE! However, you must look closely at the TIMETABLE and the IRS GUIDANCE with your accountant to plan the most benefits from a new project like solar photovoltaics. The latest details out of Washington can mean GOOD NEWS for your solar project, if you act NOW.
New guidance is out now from the Internal Revenue Service and Treasury Department, clarifying that YES, you can still potentially get a 30% or more tax credit for your new solar
PV system. Also, YES, you can still potentially use the 5% Safe Harbor rule, as long as your system is under a megawatt and a half. If your system is for your own business such as a manufacturing center, a warehouse, an office, or a store, chances are the scale of your system is still well under 1.5 MW, and the previous rules apply when it comes to starting and paying for a certain amount of your system in a specific calendar year.
The new guidance just got stricter for PV systems that are a 1.5 MW and above. For those, the rules about starting construction now call for meeting a “Physical Work Test,” and you’ll want to dig into how that is defined with your accountant. A 2 MW system might need something like the racking structure already built in 2025 to be able to claim tax credits in this year, as noted in the guidance as “(b) Applicable solar facility. On-site physical work of a significant nature may include the installation of racks or other structures to affix photovoltaic (PV) panels, collectors, or solar cells to a site.”
What deadlines should you be concerned about if your PV project is still in the planning stages? July 4, 2026 is the new beginning of construction deadline, while December 31, 2027 is the cutoff “placed in service” date for projects using these popular clean energy tax credits which are being phased out under current administration policies. That means there is adequate TIME to PLAN and BEGIN a project in 2025 or 2026 if you understand the rules.
You can read the entire IRS/Treasury document Notice 2025-42 here.
Treasury and the IRS are expected to unveil more specifics on where components can be made, under upcoming “Prohibited Foreign Entities” guidance.
PV Magazine summarizes the new guidance here.