Due to supply chain disruptions related to the COVID-19 pandemic, the IRS released Notice 2020-41 (the “Notice”), which grants two beginning construction-related extensions for renewable energy projects that produce electricity from sources such as wind, biomass, geothermal, landfill gas, trash, and hydropower. First, the Notice adds an extra year to the four year “Continuity Safe Harbor” detailed in Notice 2018-59 and other existing guidance. Under the Notice, projects that began construction in 2016 or 2017 will still qualify for the safe harbor if such projects are placed in service within five years. Second, if taxpayers began construction by incurring 5% of project costs on or after September 16, 2019 and reasonably expected to receive such property or services with 3½ months of payment, the Notice states that if such property or services are received by October 15, 2020 such expectation of delivery at the time of payment remains reasonable.
