Recent federal changes have tightened eligibility for the Sec. 48E clean electricity investment credit for wind and solar projects. The 2025 law accelerates the credit’s termination, requiring projects that begin construction after July 4th 2026, to be placed in service by December 31st 2027, to qualify. New IRS guidance also limits most larger projects starting after September 2nd 2025, to using the physical-work test – eliminating the 5% safe harbor in many cases. In addition, new “prohibited foreign entity” rules deny credits for projects that rely too heavily on components sourced from certain foreign entities. Overall, developers must carefully document construction start dates, meet continuity requirements, and evaluate supply chains to preserve credit eligibility.
