In August 2025, the Ministry of Finance and the Internal Revenue Service (IRS) released new guidelines related to investment tax credits (ITC) for safe haven solar projects. Safe harbor allows companies to demonstrate goodwill efforts when launching solar projects to ensure applicable tax credits for the year.

Utility scale solar projects used to be able to use the "5% safe harbor" rule, which only required project developers to bear 5% of project costs by a specific date, but the federal government changed it to "physical work testing". Projects exceeding 1.5 megawatts must install racks on site at least before July 4, 2026, in order to apply for ITC.

Physical work requirements do not include 'preliminary activities' such as leveling the land, conducting research, or clearing the site. The IRS also requires projects that use physical work testing to "maintain a continuous construction plan," where "the physical work performed is of significant importance.

Projects smaller than 1.5 megawatts can still use a 5% safe harbor. All projects still have four years to be put into use under the continuous safe harbor.

Democratic Senators Katherine Cortes Masto (Nevada), Chuck Schumer (New York), and Ron Wyden (Oregon) stated that this is a sudden rule change. Three people proposed a resolution this month under the Congressional Review Act to overturn the IRS' physical work testing rules, as it "makes it harder for wind and solar companies to apply for important tax credits" and "increases the cost of building clean energy infrastructure in the United States, damages the country's ability to meet growing electricity demand, and leads to rising energy prices for working families.

Cortes Masto said, "The last-minute changes made by the IRS to its guidelines are nothing more than a blatant attempt to disqualify projects needed to build our country's clean energy infrastructure." "For years, wind and solar companies have been planning investments in our national energy grid, preparing to meet our growing energy needs, create high paying jobs, and invest in our future. Republican tax laws and government last-minute guidance will raise energy prices and restrain investment, and Congress must intervene.