What is Safe Harbor & how does thyssenkrupp Supply Chain Services provide logistics support?
The investment tax credit (ITC), also known as the federal solar tax credit, allows you to deduct 26 percent of the cost of installing a solar energy system in 2020 from your federal taxes. The ITC applies to both residential and commercial systems, and there is no cap. Safe Harbor allows solar customers to preserve the tax credit of the current year by beginning construction on a solar project.
As of 2020: owners of new commercial solar can deduct 26 percent of the cost of the system from their taxes.
2021: Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.
2022 onwards: Owners of new commercial solar energy systems can deduct 10 percent of the cost of the system from their taxes.
Note: There is no federal credit for residential solar energy systems
*UPDATE* - In May of 2020, due to the COVID-19 pandemic, the U.S. treasury department issued Notice 2020-41 related to the Safe Harbor deadline for renewable energy projects that began construction in 2016 or 2017. Under the old ruling, those projects would have needed to become operational by the end of 2020 to claim their Investment Tax Credit (ITC). The new ruling allows companies to claim the full 30% credit for solar projects and the full 2.5 cents per kWh Production Tax Credit (PTC) for wind projects until the end of 2021 to begin generating power.
What if a project cannot generate power by the end of 2021?
Another tax incentive to companies is beginning a project in 2020 and incurring at least 5% of that project cost. The requirement for this varies based on the accounting method of the project owner and has specific standards that must be met to ensure Safe Harbor. Many companies choose to incur 7% of a project cost to safeguard Safe Harbor.
How can thyssenkrupp Supply Chain Services help?
When companies set out to incur the project development and equipment costs, it means the purchase and receipt of materials; solar panels, racking, and inverters. Purchasing these items out of the gate means they often require “Safe Harbor” storage and professional inventory management until the project has reached the point where it is ready for installation. Companies have up to 48 months to complete the project, so the storage requirements can vary from a few months to a few years. Optimal storage, low cost, highly flexible, & secure job site deliveries with TK run equipment and are key elements within tkSCS’ value based service offerings.
tkSCS is the premiere safe harbor warehouse and logistics provider for today’s innovative companies operating within the renewable energy industry. Since the fall of 2019, our team of thyssenkrupp professionals have added nearly 4 MILLION square feet of flexible/pay per use warehousing to our secure asset based distribution footprint. Most of the additional space has been to support not only Safe Harbor solar programs, but multiple renewable energy projects in development here in the US and Canada.