Taking 2019 Tax Credit for 2018 solar project

Taking 2019 Tax Credit for 2018 solar project

Many people ask us towards the end of the year if they can take the tax credit even with the solar energy system they signed a contract for is not installed yet.

The short answer is: "Yes, because of the Safe Harbor Guidance" that the IRS released in June, 2018

Safe Harbor guidance and defining the word “commenced”

In terms of the calendar, some solar projects span the changeover of the year (2019 to 2020, for example) while still in progress. Preliminary steps such as tree removal, electrical work, etc may push your project completion back - keep in mind that you could be able to apply the tax credit to these services, as well as home batteries if they are included in your solar project!

solar home - all black solar panels

In June 2018 the IRS, U.S. Federal organization overseeing these items released IRS safe harbor - Notice 2018-59 (TN). Watchers widely considered it to provide Safe Harbor for solar projects in some stage of progress toward commencing in the next three years.

“Commenced construction” here means either having “started work of a significant nature or… having incurred 5% or more of the cost of the facility [i.e. solar installation] in that year that construction began.”

You can read more about IRS rules and tax credits here. We provide this as guidance. We are solar installers, not tax advisers, so we recommend you reach out to your own accountant.

Don't wait! Congress may not extend tax credits at the full 30% level beyond the end of 2019. There will be state-level benefits for going solar also, which vary in DC, Maryland and Virginia! 

Read our financial benefits to go solar with your business.


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