Treasury Department releases new guidance on clean energy tax credits

The Treasury Department has released new guidance on investment and production tax credits used by renewable energy developers, setting stricter requirements on when a project is considered to have started construction. Previously, such projects were considered eligible for the credits if developers had spent at least 5% of the planned projects cost. Under the new rules, that 5% stipulation is eliminated, instead requiring developers prove “physical work of a significant nature” has been taking place on an ongoing basis. Following the release of the guidance, Sunrun (RUN), the biggest U.S. residential solar company, is up 32% in Friday afternoon trading. NextEra Energy (NEE), a large-scale solar and wind developer, is up about 4%. Other publicly traded companies in the solar energy space include Array Technologies (ARRY), Canadian Solar (CSIQ), Complete Solaria (SPWR), Emeren (SOL), Enphase Energy (ENPH), FTC Solar (FTCI), First Solar (FSLR), JinkoSolar (JKS), Maxeon Solar (MAXN), Shoals Technologies (SHLS), and SolarEdge (SEDG).