The guidance is in response to requests from the wind industry for further clarification as to two issues. First, what level of physical work was required for projects, which did not opt to satisfy the 5 percent safe harbor, to be deemed to have started construction in 2013 as is necessary for PTC eligibility? Second, what level of legal stake must a developer have had in a project in 2013 to have purchased equipment pursuant to a master supply agreement with a manufacturer that is subsequently transferred to the project in order to enable the project to satisfy the 5 percent safe harbor?
Release of the clarifying guidance in the next week or two would be good news for the wind industry. It is already late in 2014 for projects to have time to raise the financing necessary to complete construction in order to be in placed in service by the end of 2015 as the safe harbor for PTC eligibility requires.
One can only hope that the government lawyers who have principal responsibility for the clarifying guidance have lined up the required approvals from their colleagues at Treasury and the IRS. Otherwise, summer vacation schedules of one or more senior tax officials could delay the guidance beyond the next week or two. Due to vacation schedules, July and August are traditionally slow periods for the issuance of tax guidance.
1 Bloomberg GE Earnings Call Transcript (Jul. 18, 2013).
