For the past few years, commercial solar followed a relatively straightforward, wide path. Incentives were critical, equipment was widely available, and developers were eager to engage. If you stayed on the trail, you’d likely end up in a sunny spot.
But with the change in administrations, the wide path is narrowing, in large part due to the passage of the One Big Beautiful Bill Act (OBBBA). The OBBBA’s most noteworthy change for the solar industry is to aggressively ramp down the 30% Investment Tax Credit (ITC), which would have strong negative implications for ownership IRRs, lease payments, and power purchase agreement rates.
Instead of a ramp starting in the 2030s, solar projects will only receive the ITC if one of the following conditions is met:
Moreover, there are also myriad other details and ways that the OBBBA will continue to affect the solar industry and potentially limit how asset owners can earn and use the tax credit:
There is still a real opportunity for asset owners who want to pursue solar, but the urgency in the solar market has changed and project development has entered a new phase. Passive exploration, broad feasibility studies, or “getting a few bids to see what happens” are moves that are not going to produce ideal outcomes given the very real time pressure to earn the full credit.
The most immediate hurdle is the July 4, 2026, safe harbor deadline. Safe harboring is a tax concept that allows a project to lock in eligibility for the credit by incurring 5% of total costs (typically through equipment purchases), so long as the project is completed within a defined period (historically four years). Projects must have a real level of de-risking to qualify; to safe harbor, you can’t start July 1, 2026, and expect to safe harbor by July 4. We also expect updated guidance from the Treasury Department in a few weeks per an executive order.
If you have been considering solar but haven’t engaged yet:
Now is the time to get started. There’s still an incredible opportunity to monetize the full credit, but it takes time. The priority is site screening and portfolio analysis while building an internal action plan before running a structured RFP. The path to safe harboring includes feasibility, design, and early contracting, all of which take many months. Engage with SolarKal to accelerate the timeline and dramatically increase your probability of success.
If you have identified projects but have not gone to market yet:
You still have a good shot at qualifying. The priority is getting qualified sites to vendors who have the capacity for your projects and can earn you the credit by hitting that safe harbor deadline. Going to market within the next three to six months puts you in good shape to hit the deadline. Wait too long and you may find yourself either squeezed on pricing or left without options.
If you have projects with signed contracts or are later in the process:
You’re in a strong position to safe harbor. The priority here is checking with your vendor and trusting SolarKal to ensure your system is set up to hit the requirements. Implementing an operational plan to minimize risk is key.
Not every project will be ready in time to meet the July 4, 2026 safe harbor deadline. That doesn’t mean the ITC is off the table, but it does change what’s required.
Under the OBBBA, projects that aren’t safe harbored must be placed in service by December 31, 2027 to still qualify for the ITC. That gives developers and asset owners a different kind of pressure: There’s no longer a buffer—the project has to be fully built and energized by that date.
What this really means is that right now, you need to be working backward from that in-service deadline. Interconnection timelines, procurement lead times, construction delays, potentially stringent FEOC restrictions—all of it needs to be modeled and accounted for.
A mid-2027 construction start isn’t going to cut it in most cases; if you’re targeting year-end 2027, you’re going to need the following by Q2 2027:
Remember: The further into 2026 and 2027 a project goes, the more it will compete for developer attention, labor, and panels—many other projects will be trying to meet the same hard stop. There’s a real risk in assuming you can wait and sprint at the end. If the safe harbor deadline is a gate, the placed-in-service deadline is a wall, and there won’t be much forgiveness for delays, even if the delays are out of your control.
If you know you can’t meet the July 2026 hurdle, it’s worth evaluating today what a clean 2027 execution plan looks like—and whether it makes sense to accelerate timelines now to avoid unnecessary risk later. SolarKal’s experience and track record over hundreds of active and completed projects can be make-or-break here.
In short, the path just got narrower and more complicated, and the route to maximum incentives is rapidly ending. But there are lots of opportunities during transition, so this is a moment when having a guide matters the most.
For example, local programs and incentives are becoming more consequential. With federal uncertainty on the rise, state programs—and the timelines they operate on—are once again becoming a deciding factor in economic viability. Be on the lookout as states adapt their programs in the coming months.
Precision and speed are paramount, and a lasting advantage goes to those who know how to get to the gold. Being able to read the changing map is becoming the most important component of success. Let SolarKal guide you through.
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