IRS Issues Guidance on Beginning Construction for Renewable Energy Credits!

The One Big Beautiful Bill Act eliminates the Clean Electricity Investment Credit (Sec. 48E) and the Clean Electricity Production Credit (Sec. 45Y) for wind and solar facilities placed in service after 2027, unless construction begins on or before July 4, 2026. The IRS has provided guidance (IRS Notice 2025-42) on what constitutes the “beginning of construction.” Those wanting to claim a credit must meet a “Physical Work Test.” It requires the performance of physical work of a significant nature. The test is centered on the work’s nature, not the costs. For more details from the IRS: https://bit.ly/4mKuPX9