Year-End Planning for Energy Tax Incentives: Deadlines That Matter Going Into 2026

As we close out the year, several energy tax incentive deadlines are approaching that deserve immediate attention. We are already seeing projects miss opportunities simply because planning started too late. The goal of this note is to highlight the timelines that matter most for ITC and 179D, and to encourage early coordination so projects are positioned correctly.

If you have projects in development, construction, or recently placed in service, now is the time to engage.

Investment Tax Credit (ITC): Timing Matters More Than Ever

There are two critical timing issues for solar and other ITC-eligible projects that we are discussing daily with clients.

End of Year FEOC Planning

Projects that begin construction before year end can avoid future Foreign Entity of Concern compliance requirements. For many developers, this is a meaningful risk mitigation step. Once FEOC rules apply, compliance becomes more complex and documentation expectations increase. Starting construction before year end allows projects to stay outside those requirements altogether.

This is a clear planning window that will not be available later.

July 4, 2026, Safe Harbor for Solar

Solar projects that begin construction before July 4, 2026, are grandfathered into the current completion framework. As long as continuity is maintained, these projects are not subject to an accelerated placed in service deadline.

Projects that start after July 4, 2026, must be placed in service by the end of 2027. That shortened timeline introduces execution risk that many developers are underestimating today.

If a solar project is likely to slip past mid-2026, it should be evaluated now to determine whether physical work or safe harbor steps can be taken to lock in more favorable treatment.

Prevailing Wage and Apprenticeship: Start Monitoring Early

For projects over 1 MW, prevailing wage and apprenticeship compliance is no longer something that can be checked after the fact.

We are seeing a growing number of projects that were expected to qualify for the PWA bonus fall out of compliance simply because no one was actively monitoring payroll and apprenticeship requirements during construction.

There is a limited ability to cure PWA issues within one month following the quarter in which non-compliance occurs. However, you only have that option if the issue is identified in time. If no monitoring is in place, the opportunity to cure is often missed.

Proactive PWA monitoring should start as soon as construction begins. Waiting until project closeout is proving to be too late.

Section 179D: Demand Is Accelerating and Timelines Are Tightening

Demand for 179D certifications is already ramping up as we head into 2026, and that demand is expected to accelerate.

There is growing concern around a potential phase-out for projects that start after June 30, 2026. That date is also critical for grandfathering new projects through the physical work test.

While we remain hopeful that Congress will preserve 179D given its long history of bipartisan support, prudent stakeholders are planning for the possibility that timelines change.

Owners, designers, and ESCOs should be thinking about starting 179D certifications earlier than ever, and about carrying forward as many deductions as possible while the rules remain favorable.

Call to Action: Send Projects Now

Deadlines are approaching faster than many schedules reflect. Early engagement creates options. Late engagement limits them.

If you have projects that may qualify for 179D, ITC, PWA bonuses, housing-related incentives, or engineered utility studies, we encourage you to send them to us now for review.

Planning ahead is no longer optional. It is how credits are preserved, risks are reduced, and value is maximized.