The US solar tax credit's start-building deadline has passed, and late projects now race a December 2027 finish line
pv magazine USA: under the 2025 tax law, solar projects that started construction after 4 July 2026 keep the credit only if placed in service by 31 December 2027. Treasury's physical work test applies above 1.5 MW. Adding storage and claiming the credit on that is one route lawyers name.
A US warehouse owner who signed for rooftop solar this summer is now asking a different question from last year. Not how much the credit is, but whether the job finishes in time to get it.
pv magazine USA laid out the position on 8 July 2026. Under the One Big Beautiful Bill Act of 2025, solar projects that began construction after 4 July 2026 keep the investment tax credit only if they are placed in service by 31 December 2027. Treasury Notice 2025-42 tightened what counts as starting construction for any solar project larger than 1.5 MW: the old 5% spending safe harbor gave way to a physical work test, meaning physical work of a significant nature on site.
Hilary Lefko, an attorney with Norton Rose Fulbright, listed the routes still open: get projects in service by the end of 2027, add storage and claim tax credits on that instead of solar, buy partly developed projects that already started construction, or make the project work without credits. Clean-energy business group E2 estimates nearly 10 GW of new capacity has been cancelled.
Analogy: the shop has not closed, but it now shuts at a fixed hour. Anyone still in the queue at closing time goes home empty-handed.
Good: the rules are now fixed and public. A business buyer can ask an installer one plain question: will this be in service before 31 December 2027?
Bad: for projects above 1.5 MW, the start-of-construction test is harder than before. The article does not spell out the path for smaller systems, so check that with your tax adviser.
Ugly: storage is named as a way to keep a credit alive. That can push sellers to add a battery for tax reasons, not because the site's bill needs one. Ask for the numbers with and without it.
Source: pv magazine USA, 8 Jul 2026 - qualifying for solar tax credits beyond the July 4th deadline. Not tax advice. Restated from the article.