The United States Treasury Department formally extended the eligibility deadlines for Production Tax Credits (PTC) and Investment Tax Credits (ITC) in connection with renewable energy facilities. The extensions are a welcomed relief for solar, wind, and other renewable energy projects navigating the uncertainties of the COVID-19 pandemic. The extensions were announced in Notice 20-41, issued May 27, 2020, and offer the following guidance:

• Renewable energy facilities relying on the Continuity Safe Harbor will now have five years (previously four) to complete projects that commenced in 2016 and 2017 while maintaining PTC and ITC eligibility

• Developers and investors using the Five Percent Safe Harbor retain their eligibility so long as the taxpayer (i) invested 5% of project costs by December 31, 2019, (ii) reasonably expected the delivery of equipment intended to satisfy the safe harbor within 3 ½ months after the date of payment, and (iii) received the qualifying equipment by October 15, 2020 for equipment paid for on or after September 16, 2019. Notice 20-41 reasons that the taxpayer had a reasonable expectation that the equipment purchased would be received within the 3 ½ month safe harbor and therefore extends the safe harbor qualifying date so long as the qualifying equipment is received by October 15, 2020.

While this is good news for the renewable industry, developers and investors will want to be diligent and mindful of how these extensions may impact any investment credit recapture penalties due to a change in ownership, financial restructuring, or default under any applicable development contracts.