Commercial Solar 30% Investment Tax Credit Extended by 2 More Years

This is great news! Essentially, the IRS has given commercial businesses the opportunity to take full advantage of the 30% tax credit amount for two more years.  That’s good news for your finance department that wants to capture the financial benefits on your tax statements to offset your tax liabilities.

For all practical purposes, medium- and large-scale solar power projects that expect to take a year to two (or more) for development and construction just got a two year extension on the Investment Tax Credit (ITC).

Per the ‘Bipartisan Budget Act of 2018, Pub. L. 115-123, Div. D, Title I, § 40411, 132 Stat. 150 (BBA 2018)‘, and published in Notice 2018-59, the Internal Revenue Service (IRS) has officially noted that it is “replacing the requirement to place energy property in service by a certain date with a requirement to begin construction by a certain later date.”

Meaning that instead of your solar project having to finish by December 31st, 2019, it must now begin (defined below in two specific ways) on or by that date t0 qualify for 30%. This same logic applies to the follow two years and their 26% and 22% tax credits.

The IRS notes that there are two methods for ‘establishing beginning of construction’ – the Physical Work Test or the Five Percent Safe Harbor.

Onsite physical work can take many forms, however, it does include any of the following “preliminary activities”:

(a) planning or designing; (b) securing financing; (c) exploring; (d) researching; (e) conducting mapping and modeling to assess a resource; (f) obtaining permits and licenses; (g) conducting geophysical, gravity, magnetic, seismic and resistivity surveys; (h) conducting environmental and engineering studies

It is notable that manufacturing of hardware necessary to the project that is done off-site counts toward physical work, including assembly of “racks and rails, inverters, and transformers.” However, if those components come from inventory or are normally held in inventory, then they aren’t allowed to be considered “physical work.”

The Five Percent Safe Harbor provision states that construction will be considered as having begun if the taxpayer has paid or incurred – per Treas. Reg. § 1.461-1(a) – 5% of more of the total cost of the project. This does not include land costs.

Keith Martin of Norton Rose Fulbright notes that an equipment or service purchase – a ‘bare payment’ alone – can account for the 5% rule if it is delivered within 31/2 months.

Once work begins, it must keep going – meeting a continuity requirement.


Real world consequences

Also noted by Martin, is that the IRS guidance is not addressed to the directly owned residential solar power market – as this is the corporate focused Investment Tax Credit, and not the Residential Renewable Energy Tax Credit. However, it does apply to third party owned residential solar systems that solar companies lease or use to sell electricity to homeowners.

In the larger commercial and utility scale projects this ruling will absolutely be put into the spreadsheets of financiers at the utilities, which have explicitly stated these solar power tax benefits are driving their decision-making. For instance, in Xcel Energy’s recent long-term plan – which included solar power bids as low as 2.2¢/kWh – the company stated:

Bidders’ ability to take full advantage of the full federal PTC and ITC combined with falling costs for renewable technologies  resulted in a robust pool of wind, solar with battery, and solar bids at unprecedented pricing.

This two year window will give investors and utilities reasonable motivation to invest in more projects, even as end of year dates arrive. And this in turn can have repercussions for fossil generation, as Xcel noted that this would allow it to close two coal plants a decade early.

Conversely, there could also be projects whose timelines are extended. For instance, the above Xcel Energy projects could potentially be pushed back up to two years under the expectation of continued declines in hardware pricing for solar panels, batteries and other components.

This article was originally published in PV Magazine on  

SolarStratos To the Edge of Space With Sunpower Solar Panels

SunPower isn’t just powering roofs and solar farms these days. The company, which touts its solar panels as the most durable and efficient on the market, is looking at other applications. I’d be hard pressed to find one as awesome as the upcoming Mission SolarStratos expedition which will be powered by its 22-24% efficient Maxeon™ solar cells.

The SolarStratos is an electric plane that has the flight characteristics of a low drag glider. It has extremely long thin wings and a very small profile.  However it is outfitted with an electric motor, a very efficient front propeller, and wings and tail covered with around 24 square meters of solar panels. Inside fit up to 2 pilots in fighter configuration and what appears to be a 20kWh battery (nearly the same size as the 125 mile Hyundai IONIQ).

Interestingly this plane will not be pressurized, requiring the pilots to wear space suits that are also powered by the energy from the solar panels and stored in the battery.

Some stats from the press release (below):

  • Length: 8.5 meters – about 30 feet, or the distance from the end zone to the 10-yard line on an American football field
  • Wingspan: 24.8 meters – about 81 feet, or the length of two standard city buses
  • Weight: 450 kilograms – about as heavy as a grand piano; to make SolarStratos its lightest, the cabin will not be pressurized, requiring pilots to wear astronaut suits that are pressurized by solar energy
  • Engine: 32-kilowatt electrical engine, about one-third the size of what would power an electric vehicle
  • Energy: 22 square meters of SunPower Maxeon solar cells, each reaching 22 to 24 percent efficiency
  • Batteries: One 20-kilowatt lithium ion battery
  • Autonomy: Self-generates electricity with solar to power the plane for more than 12 hours

Contact us today to learn how Sunpower solar panels can power your commercial business by lowering your annual operating costs.  Call 480.636.0321

The Basic Components of a Commercial Solar Panel System

How do solar panels work? What is the photovoltaic effect? What are the basic components of a commercial solar panel installation?

Honestly, solar is super simple.

This video overviews the typical commercial solar panel system components and how solar panels produce electricity. Really basic stuff but it’s part of the education process of helping people understand renewable energy and solar systems. It even covers potential savings to your average electric bill with solar panels.



So if you’re considering installing solar for your business, invest the 80 seconds to watch. Depending on your situation and need we install a variety of different solar panel manufacturers for our customers solar systems. We have a lot of flexibility but lean on the equipment that offers the maximum amount of value for each situation. Sunpower is known in the solar community as one of the best if not the best equipment manufacturer in the industry. It’s truly a superior product in many ways and one of our best selling products. Call today to learn more about how solar can help your business lower it’s electricity costs and save your business money.

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