In the wake of the coronavirus (COVID-19) outbreak, the Treasury Department and the Internal Revenue Service (IRS) of the United States of America, have announced tax relief for taxpayers who have installed renewable energy projects.
This relief would apply to renewable projects using sources such as solar, wind, biomass, geothermal, landfill gas, trash, and hydropower, fuel cells, microturbines, and combined heat and power systems.
In a press statement, the IRS said that the relief had been announced because COVID-19 has caused industry-wide delays in the supply chain for components needed to complete renewable energy projects that are otherwise eligible for the investment tax credit (ITC).
For some projects that began construction either in 2016 or 2017, an extra year to the already existing four-year continuity safe harbor has been provided to complete the construction work seamlessly.
As per the notice, the government has allowed some companies additional time to receive materials, which will help them to start the construction works.
It has also provided a 3.5-month safe harbor for services or property paid for by the taxpayer on or after September 16, 2019, and received by October 15, 2020.
According to the notice, “By extending the continuity safe harbor and providing a 3.5-month safe harbor, the guidance will provide flexibility for taxpayers to satisfy the beginning of construction requirements and limit the impact of COVID-19-related delays on the ability to claim tax credits.”
The top three solar markets in the world – China, U.S., and India, added nearly 51 GW of solar capacity in 2019. This year, these three markets, along with the rest of the world, have been severely affected by the slowdown caused due to the ongoing coronavirus pandemic.
Recently, the International Energy Agency (IEA) had released a report that focused on global energy demand and decline in the first quarter of 2020. The report stated that in March 2020, the production facilities of wind energy supply chains, especially in India, Europe, and the U.S., were either closed or reduced their activities.
Anjana is a news editor at Mercom India. Before joining Mercom, she held roles of senior editor, district correspondent, and sub-editor for The Times of India, Biospectrum and The Sunday Guardian. Before that, she worked at the Deccan Herald and the Asianlite as chief sub-editor and news editor. She has also contributed to The Quint, Hindustan Times, The New Indian Express, Reader’s Digest (UK edition), IndiaSe (Singapore-based magazine) and Asiaville. Anjana holds a Master’s degree in Geography from North Bengal University, and a diploma in mass communication and journalism from Guru Ghasidas University, Bhopal.