New guidance released by President Donald Trump’s administration has tightened up the rules under which wind and solar projects can qualify for Biden-era tax credits.
Under Trump’s One Big Beautiful Bill Act, renewable developers have until next summer to begin project construction in order to qualify for tax credits.
The new guidance stipulates that developers must begin physical work by 6 July, 2026 in order to qualify for tax credits.
Previously developers could spend 5% of a project’s capital costs to qualify for the tax credits.
The new test “focuses on the nature of the work performed, not the amount or the cost”, the guidance reads.
The guidance continued: “Provided that physical work performed is of a significant nature, there is no fixed minimum amount of work or monetary or percentage threshold required to satisfy the Physical Work Test.”
American Clean Power Association (ACP) CEO Jason Grumet said: “The Treasury Department’s decision to accelerate the phase out of clean energy tax credits undermines the integrity of our energy grid and our legislative process.”