Solar tracker provider GameChanger Solar said it can help project developers perform the physical work test required to qualify for the federal Investment Tax Credit and Production Tax Credit.
Under the One Big Beautiful Bill Act (OBBBA), solar projects must begin construction within 12 months of enactment of the OBBBA (by July 4, 2026) or be placed in service before Dec. 31, 2027, to be eligible for the credits.
The new guidance, issued in August, “made it harder” for projects to qualify for tax credits, but the changes “were not as bad as rumored” said Keith Martin, partner, Norton Rose Fulbright.
In the new guidance, Treasury discarded the bright-line 5% capital expenditure test for starting construction of solar projects over 1.5 MW. Projects smaller than 1.5 MW can still achieve tax credit eligibility by showing a 5% capital expenditure.
The 5% spend test for larger projects has been replaced with a “less clear facts-and-circumstances approach of looking at the amount of physical work done by a factory on custom-made equipment for the project or at the project site,” said Martin.
To qualify, projects must start “physical work of a significant nature” at the project site. In the past, projects merely had to have “begun” physical work, but under the new guidance the work will have to have been “performed.” The “physical work” can include both on-site and off-site work.
GameChange Solar said it can help project developers pass the “physical work” test. Off-site physical work generally includes manufacturing of solar mounting equipment such as torque tubes, purlins and posts, provided they are manufactured pursuant to a binding written contract that pre-dates the construction of the solar project, are customized for the project, and not drawn from inventory (or normally held in inventory), said the company. On-site physical work generally includes the installation of solar mounting equipment that affixes solar modules to the project site.
“The emphasis on customization and the removal of the 5% Safe Harbor mean that careful planning is essential. Generic components or raw materials will not count, so developers need to show fabrication of custom project-specific parts,” said Philip Vyhanek, president and chief operating officer, GameChage Solar.
GameChange Solar said the qualification rules highlight the importance of working with partners that provide custom-fabricated, project-specific mounting components and are able to assist with establishing the start of construction.
“Our ability to deliver job-specific fabricated tubes and structural components will be useful for customers as they seek to comply with the new rules under Notice 2025-42,” said Vyhanek. “We’re committed to helping developers capture the value of the credit and move projects forward in a timely way.”
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