On 15 August 2025 the IRS released Notice 2025-42 (the Notice), which restricts the methods that developers of wind and solar projects can use to determine whether they have begun construction for purposes of the section 45Y production credit and the section 48E investment credit on and after 2 September 2025. The beginning of construction determination is significant because, following passage of the One Big Beautiful Bill Act (the OBBBA), wind and solar projects that are not placed in service by 31 December 2027 must begin construction prior to 5 July 2026 (the BOC Deadline) to be eligible for section 45Y and 48E tax credits. The Notice removes a commonly relied-upon safe harbor that existed under prior IRS guidance.

The Notice removes (except for low-output solar facilities) the 5% saf

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