PVTIME – A US federal court has overturned amended tax rules issued by the IRS under the previous Trump administration, which restricted wind and solar projects’ access to federal renewable energy subsidies.
This ruling is another judicial setback for the former administration’s collective measures designed to curb the uptake of renewable energy, amid persistent doubts over the reliability of clean energy and the fairness of the associated subsidies.
Delivered by Judge Colleen Kollar-Kotelly at the US District Court for the District of Columbia at the weekend, the judgement ruled that the IRS had failed to provide sufficient legal justification for revoking the long-standing official definition of projects categorised as under construction.
To qualify for a 30% tax credit and additional subsidies under federal legislation, clean energy projects must begin construction by 4 July this year or be fully operational by the end of 2027. For a decade, developers have been able to obtain a four-year statutory safe harbour by carrying out continuous on-site work or by covering 5% of the total project costs in advance. However, the revised August guidelines withdrew this eligibility criterion for all projects except micro-scale facilities. The updated ruling has now returned the disputed amendments to the IRS for comprehensive reassessment.
The legal challenge was lodged last year by a coalition of parties covering environmental bodies, consumer advocacy groups, San Francisco municipal authorities, and the clean energy consultancy Woven Energy. They argued that the regulatory revisions would drive up national power prices and stall the development of new renewable assets.
San Francisco’s City Attorney, David Chiu, acknowledged that the verdict served as a crucial check on detrimental federal regulatory moves that were pushing up residential energy costs. He added that there are ongoing efforts to sustain equitable and predictable market conditions for the entire clean energy sector. The IRS has declined to comment on ongoing legal proceedings.
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