{"id":158811,"date":"2025-08-18T11:03:57","date_gmt":"2025-08-18T11:03:57","guid":{"rendered":"https:\/\/www.pv-tech.org\/?p=158811"},"modified":"2025-08-18T11:03:58","modified_gmt":"2025-08-18T11:03:58","slug":"us-treasury-start-of-construction-guidance-undermines-congress-donald-trump-solar-power","status":"publish","type":"post","link":"https:\/\/www.pv-tech.org\/us-treasury-start-of-construction-guidance-undermines-congress-donald-trump-solar-power\/","title":{"rendered":"US solar industry attacks tightened safe harbour rules for ITC qualification"},"content":{"rendered":"\n
\"Building
The new guidance says that projects must pass a \u201cPhysical Work Test\u201d to meet the \u201cstart of construction\u201d threshold. Image: Sealy j via Wikimedia.<\/figcaption><\/figure>\n\n\n\n

US solar industry representatives have voiced concern at the US Treasury Department\u2019s new \u201cstart of construction\u201d rules for renewable energy projects seeking to obtain federal tax credits.<\/p>\n\n\n\n

The new rules, which follow an executive order from president Trump in July, represent a significant tightening of existing safe-harbouring measures, which previously specified that 5% of a project’s costs must be spent by a certain time. <\/p>\n\n\n\n

For solar projects over 1.5MW, this allowance will be removed, and, from 2 September 2025, projects above that threshold must adhere to a stricter definition of “start of construction” in order to lock in tax credits. <\/p>\n\n\n\n

\u2018Anti-clean energy ideologues\u2019<\/strong><\/h2>\n\n\n\n

Abigail Ross Hopper, head of the Solar Energy Industries Association (SEIA), decried new guidance as ” part of an unprecedented side deal the administration made with anti-clean energy ideologues to undermine Congress and further harm America\u2019s solar industry\u201d.<\/p>\n\n\n\n

She called the new rules a \u201cblatant rejection of what Congress passed in H.R. 1, [which threaten] thousands of small businesses across the country that are the backbone of our clean energy economy\u201d.<\/p>\n\n\n\n

Other industry figures joined Hopper in criticising the politicisation of the guidance.<\/p>\n\n\n\n

Jeff Cramer, CEO of the Coalition for Community Solar Access (CCSA), said the guidance \u201crewrites\u201d the One, Big, Beautiful Bill Act (OBBBA), which Congress passed last month.<\/p>\n\n\n\n

\u201cBy narrowing the rules for what qualifies as having \u2018started construction,\u2019 the administration has upended long-standing, bipartisan standards in a way never agreed to during the legislative process,\u201d Cramer said. \u201cAt a time when state leaders across the country\u2014in red and blue states alike\u2014are embracing an all-of-the-above energy strategy\u2026the White House is choosing a \u2018some-of-the-above\u2019 approach.\u201d<\/p>\n\n\n\n

Furthermore, the head of the American Clean Power Association (ACP), Jason Grumet, said the move \u201cundermines the integrity of our energy grid and our legislative process.\u201d<\/p>\n\n\n\n

The executive order was issued on 7 July<\/a>, three days after Congress approved the OBBBA and the president signed it into law. The order explicitly instructed the Treasury to \u201cbuild upon and strengthen\u201d the provisions passed in the bill regarding the start of construction for solar and wind projects, effectively making it more difficult to obtain the Investment Tax Credit (ITC) or Production Tax Credit (PTC) for US clean energy projects.<\/p>\n\n\n\n

The OBBBA had already said that projects must be under construction by 4 July 2026 \u2013 or operational by the end of 2027 \u2013 to receive the credit.<\/p>\n\n\n\n

In an interview with PV Tech Power<\/em><\/a> before the guidance was released, clean energy investor and former head of the US Loan Programs Office (LPO) Jigar Shah said the executive order was \u201ccruel\u201d.<\/p>\n\n\n\n

Physical Work Test<\/strong><\/h2>\n\n\n\n

Instead of the 5% safe harbour provision, the new guidance says that projects over 1.5MW must pass a \u201cPhysical Work Test\u201d to meet the \u201cstart of construction\u201d threshold. The test must confirm that \u201cphysical work of a significant nature\u201d has begun on a project\u2014the guidance says this focuses on the \u201cnature of the work performed, not the amount or the cost\u201d.<\/p>\n\n\n\n

This work can include both off-site activities like manufacturing key components, including \u201csupport structures such as racks and rails, inverters and transformers\u201d, and on-site building work. For solar projects, on-site work \u201cmay include the installation of racks or other structures to affix PV panels, collectors, or solar cells to a site,\u201d Treasury said.<\/p>\n\n\n\n

Preliminary work, such as planning, designing, mapping, clearing a site or doing environmental and engineering studies, does not count towards the \u201cstart of construction\u201d.<\/p>\n\n\n\n

Moreover, a project must undergo a \u201ccontinuous programme of construction\u201d in order to qualify.<\/p>\n\n\n\n

Projects that have satisfied these “start of construction” criteria by 4 July 2026 will be considered in “continuity safe harbour”, meaning they have until the end of the fourth calendar year after construction commences to be guaranteed receipt of the tax credit.<\/p>\n\n\n\n

There are exceptions to the rules allowed for natural disruptions to construction or legislative bottlenecks. You can read the whole guidance document here.<\/a><\/p>\n\n\n\n

Impact on US energy<\/strong><\/h2>\n\n\n\n

Beyond her criticism of the politics, Hopper said: \u201cThis is yet another act of energy subtraction from the Trump administration that will further delay the buildout of affordable, reliable power. American families and businesses will pay more for electricity as a result of this action, and China will continue to outpace us in the race for electricity to power AI.\u201d<\/p>\n\n\n\n

Cramer added: \u201cWe fail to see the logic in intentionally weakening our nation\u2019s energy independence at the very moment we should be unleashing every proven technology to meet demand, enhance resilience, and keep costs down for the people we serve.\u201d<\/p>\n\n\n\n

Heather O’Neill, president & CEO at Advanced Energy United, said: \u201cThese rules create new federal red tape. They eliminate long-standing precedent for how companies demonstrate they\u2019ve begun project development.\u201d<\/p>\n\n\n\n

She said new renewable energy projects will be \u201cmore difficult and expensive to build\u201d as a result of the new rules.<\/p>\n\n\n\n

 In a report published last week, Clean Energy Associates (CEA) said the US could lose as much as 60GW of planned solar PV capacity<\/a> by 2030 if \u201cstart of construction\u201d rules are particularly harsh. The new guidance may not impact the market to that extent, but it will likely have an impact on US solar deployments.<\/p>\n","protected":false},"excerpt":{"rendered":"

US solar industry representatives have voiced concern at the US Treasury Department\u2019s new \u201cstart of construction\u201d rules for large projects.<\/p>\n","protected":false},"author":161,"featured_media":148394,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[8021,13292,100,95,13370,81,125,79,1515],"paywall-tags":[],"regions":[29],"industry-segments":[10,24],"class_list":["post-158811","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-ccsa","tag-one-big-beautiful-bill","tag-policy","tag-pv-power-plants","tag-reconciliation-bill","tag-seia","tag-solar-pv","tag-us","tag-us-treasury","regions-americas","industry-segments-markets-finance","industry-segments-policy"],"acf":[],"yoast_head":"\nUS treasury solar guidance 'undermines' Congress - PV Tech<\/title>\n<meta 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