NRECA is urging the Treasury Department to maintain its current rules for determining whether electric cooperatives and other utilities have started construction on new wind and solar projects in time to qualify for crucial federal tax credits.
Any changes to Treasury’s “beginning of construction” rules would complicate co-ops’ ability to access the credits, raising costs or forcing co-ops to abandon projects at a time of growing electricity demand, NRECA CEO Jim Matheson warned.
“The tax credits help to make projects possible for electric cooperatives that would otherwise not pencil out or would result in steep rate hikes for their consumer-members,” Matheson said in a July 15 letter to Treasury Secretary Scott Bessent.
The One Big Beautiful Bill Act, which President Donald Trump signed into law July 4, moved up deadlines for wind and solar projects to start construction in order to qualify for energy tax incentives but did not take away co-ops’ ability to access those credits through an elective-pay option.
NRECA asked Treasury to implement the new law without changing its existing start-of-construction rules, which consider construction to have begun if significant physical work on the project has started or the developer meets a “safe harbor” test where it has paid or incurred at least 5% of the total project cost.
In an executive order on July 7, the White House directed Treasury to restrict safe harbors for wind and solar facilities “unless a substantial portion of a subject facility has been built.” The order gave Treasury 45 days from the new law’s signing to issue guidance.
Matheson said keeping Treasury’s current start-of-construction rules is “critical to mitigating the inevitable risk that comes with building any energy infrastructure—from permitting delays to supply chain challenges to severe weather—all of which can impact construction schedules.”
“Changing the rules now would significantly alter the financing structures for these long-planned projects and likely result in cooperatives abandoning the projects or incurring more debt to cover the increased costs—which must ultimately be passed on to their consumer-members,” Matheson said.
Under the One Big Beautiful Bill Act, wind and solar projects can qualify for the full value of the current tax credits if they are already under construction or start construction within a year of the bill’s signing. Projects that begin construction after that 12-month window must be placed in service by the end of 2027 to be eligible for a tax credit.
The new law maintains credits past 2030 for nuclear energy, carbon capture, batteries and hydropower.
“At a time when the grid needs every megawatt possible, these tax credits provide a critical tool to America’s electric cooperatives as they strive to add energy to the grid and support President Trump’s vision for Unleashing American Energy,” Matheson concluded.
Molly Christian is a staff writer for NRECA.