The July 4, 2026 Beginning Of Construction (“BOC”) deadline is just days away, and for solar and wind developers. The choices made between now and the end of the week will determine whether their projects qualify for the full amount of Section 45Y production tax credits or Section 48E investment tax credits. The One Big Beautiful Bill Act (“OBBBA”) has transformed how we look at the future of these credits, and developers who have not yet locked in BOC are running out of time.
Whether your project is on track to establish BOC this week, still racing to get there, or already preparing for the possibility of missing the deadline, the next few days will shape your transferable credit strategy for years to come.
Under the OBBBA, wind and solar projects can claim the Section 45Y production tax credit or Section 48E investment tax credit under one of two paths:
For most utility-scale projects, Path B is effectively impossible — the December 31, 2027 placed-in-service deadline allows roughly 18 months from start to operation, which is well short of typical construction timelines for projects over a few megawatts. Path A is the realistic option, and it depends entirely on whether the project can defensibly establish that physical work of a significant nature began on or before July 4, 2026.
Establishing the beginning of construction will only be the first step. Given the political and regulatory attention around solar and wind credits, the IRS is expected to scrutinize these projects. Developers on track to meet the July 4 deadline should be planning now to address three things:
A federal court ruling on June 6, 2026 vacating IRS Notice 2025-42 restored the 5% Safe Harbor as a path to establish BOC for wind and solar projects over 1.5 MW. Developers now have two options before the July 4 deadline: the Physical Work Test and the 5% Safe Harbor. Because the IRS may issue new guidance or appeal, developers should consult tax counsel and build a documentation file strong enough to defend either path.
A complete file should include:
If a contractor performed work on your behalf, the work must have been done under a binding written contract that predates the work. Inventory items and “shelf” components do not count for the Physical Work Test.
Establishing BOC does not end the analysis. IRS guidance requires a continuous program of construction from BOC through placed-in-service. The Continuity Safe Harbor is satisfied if the project is placed in service by the end of the fourth calendar year following the year construction began — so for projects with a 2026 BOC, the deadline is December 31, 2030.
The four-year safe harbor is rigid: excusable disruptions like severe weather, natural disasters, permitting delays, and manufacturing delays for custom components do not extend it. They become relevant only if a project misses the safe harbor and must defend continuity under a facts-and-circumstances analysis. In either circumstance, the burden of proof is on the taxpayer, and the documentation should accumulate in real time, not be reconstructed years later.
Treasury and the IRS have signaled increased enforcement around solar and wind credit eligibility. Developers should assume their BOC position will be examined, and the audit file should be ready to deliver on short notice. A complete file includes the BOC memorandum, all underlying evidence, the continuity plan, EPC documents, and — for transferred credits — the representations and indemnities flowing to the buyer under Section 6418.
Projects that will not establish BOC by July 4, 2026 face a much harder position. The December 31, 2027 placed-in-service deadline would become the only remaining path for the §48E or §45Y credit, and for most utility-scale projects that timeline is not achievable. For developers in this situation, there are three realistic strategies to consider this week:
For corporate buyers in the transferable credit market, the July 4 deadline will create a clear bifurcation. Projects that established BOC in 2025 or early 2026 are already generating well-documented credits that will move through Section 6418 transfers on familiar terms. Projects pushing BOC right up to the July 4 deadline will be higher-diligence transactions — the BOC documentation must be airtight, the continuity plan must be credible, and the transfer agreement must reflect the elevated audit risk.
Sellers should expect more diligence questions, longer closing timelines, and more pointed representations in 2026 transfer agreements covering BOC and continuity. Buyers should expect to receive complete documentation packages rather than summary representations alone.
Fallbrook has facilitated transferable tax credit transactions for nearly four decades, and the OBBBA framework is the most significant shift in clean energy credit policy in a generation. We work with developers and buyers to help structure transfer agreements that reflect the realities of the post-OBBBA environment.
For developers locking in 2026 BOC positions and for buyers building forward credit pipelines, Fallbrook is positioned to facilitate the transactions that move these credits to the corporate balance sheets that need them.
To learn more, email: team@fallbrookfinancial.com, with the subject line, “Speak with Andrew!”
This article draws on OBBBA statutory text, IRS guidance, and analysis published by leading tax and energy law firms.
Disclaimer: This article reflects guidance available as of July 2026, including IRS Notice 2025-42, Executive Order 14315, and the One Big Beautiful Bill Act. Treasury and the IRS are expected to issue further guidance throughout 2026. Nothing in this article constitutes legal or tax advice. Developers and credit buyers should consult qualified tax counsel before establishing BOC positions or structuring any credit