The U.S. Treasury has released new guidance on the federal Investment Tax Credit (ITC), marking a welcome end to policy uncertainty. The message for commercial real estate (CRE) owners is clear: Delaying action can risk losing millions in value.
Today, solar is no longer just about sustainability. It’s a financial strategy with a deadline. Considering the ITC step-downs and stricter policies, timing is everything. Acting now as opposed to later could mean the difference between securing the full 30% tax credit and watching your project economics diminish.
There are two pathways depending on the size of your project.
Small-Scale Projects (≤1.5 MW AC): These have more lenient eligibility and access to the full 30% ITC. The easiest approach to lock in the tax credit is to incur 5% of total project costs by ordering some equipment. To lock the tax credit in, this 5% payment must be made before July 4, 2026, and the system must be placed in service by Dec. 31, 2030.
Large-Scale Projects (>1.5 MW): You can only lock in the tax credit by doing the Physical Work Test, which entails commencement of significant work such as racking, foundation, or structural assembly. In this case, this construction must commence before July 4, 2026.
Your project size will determine both your path and how you manage risk.
The vast majority of commercial-scale solar projects can take one to two years to move from planning into construction. The Treasury’s new rules mean that delaying your project by even months could risk the 30% tax credit.
Because of this, developers are moving fast to safe harbor equipment, stockpiling panels and inverters now to lock in the tax credit for future projects, even if projects don’t start construction until later. Some of our partners are ahead of the game, having safe-harbored millions of dollars worth of equipment; other partners are smaller and able to get to physical construction more quickly. Selecting the right solar developer is as important as ever as we work to navigate this added complexity.
For CRE owners, safe harboring provides a powerful opportunity to lock in the 30% tax credit without breaking ground right away — avoiding the risk of losing out on future projects. To maximize these benefits, however, projects must be carefully analyzed and under contract with a qualified provider. SolarKal is uniquely positioned to help owners move quickly and confidently through these milestones, ensuring the strongest project economics.
Locking in the tax credit can protect your asset’s value.
Act now to ensure today’s economics are preserved for tomorrow’s projects.
At SolarKal, our expert advisors sit at the intersection of policy and execution. Through our marketplace of vetted solar providers, as well as our partnerships with trusted advisors such as the Leo Berwick firm, we can help you:
The ITC is one of the most powerful tools to increase CRE portfolio value. However, the clock on its sunset is ticking. Projects that wait will miss out.
If you’ve been considering solar, now is the time to act. SolarKal can help you evaluate your opportunities, safe harbor strategically, and move projects forward with clarity and confidence.
