Safe Harbor: How to Maximize Solar Savings in 2024

As we approach the end of 2024 and the upcoming election year, it's important to consider how future changes could impact solar incentives. By acting before the end of the year, we can help you take advantage of current incentives and lock in lower costs through the "Safe Harbor" provision.

With increasing tariffs, changes to Net Energy Metering (NEM), and the pending election cycle, it is more important than ever to secure incentives for your project now.

Safe Harbor Provision

The IRS established a “Safe Harbor” provision in the Investment Tax Credit (ITC) which allows customers to preserve the tax credit of a given year by “beginning construction” on their solar project. The definition of “beginning construction” is at the core of the Safe Harbor provision and is important to understand before pursuing this strategy. 

Generally, there are two approaches, that qualify as “beginning construction”:

1. Incur 5% of the total project cost.
2. Begin physical work, of a significant nature, on the project.

To ensure that customers can qualify for the Safe Harbor provision, and be eligible for the 30% ITC tax rebate, as well as the valuable ITC Adders described below, it’s important to sign with TENCO SOLAR today!

• In 2024 the Department of Treasury expanded the list of locations that are eligible to receive the 10% Energy Community Adder to include almost all California counties. It is likely that the eligible counties listed will be revisited in 2025, and we expect to lose several California counties.
• Similarly to the Energy Community Adder, the Department of Treasury has made changes to the requirements to be eligible for the 10% Domestic Content Adder each year. Thes requirements became much less stringent in 2024, and our US equipment manufacturers are closer than ever to producing components that would allow our clients to take advantage of this adder.

A presidential election year usually signals a number of changes to tax laws and incentives, so don’t wait until it’s too late to preserve valuable ITC tax credits for your solar project under the Safe Harbor provision. 

Rising Tariffs

After January 1, 2025, tariff rates on panels imported from China will increase from 25% to 50%. We expect the impact of the increased tariffs to be a sharp increase in the price of solar panels.

Avoid cost increases by signing your contract with TENCO SOLAR now, so we can secure the panels for your project before the price increase in 2025!

Falling Solar Export Rates

Net Billing is expected to take another big hit when the California Public Utility Commission releases its 2025 avoided cost calculator (ACC) updates. The ACC is used to determine export value, or the rate at which utilities are required to reimburse owners for the energy they export back to the grid. Export values are predicted to drop by 50% for most utilities.

Lock in higher export values, and a lower ROI, by signing your contract with TENCO SOLAR before December 1!