With the accelerated phase-out of the federal Investment Tax Credit (ITC) now underway and shifting rules on the horizon, solar developers face a narrowing window to act. The recently passed OBBB Act and an Executive Order calling for a review of the “start of construction” requirements by August 18, 2025, have created additional uncertainty.
If your project is targeting a 2026 COD or you’re still finalizing procurement, Safe Harboring now can preserve today’s ITC rates and avoid last-minute risk.
What is Safe Harbor?
Safe Harbor provisions under Section 48 of the U.S. tax code allow developers to “start construction” under current rules and preserve tax credit eligibility, even if a project is completed years later. There are two recognized pathways:
- The 5% Test – Spend at least 5% of the project’s fair market value on qualified equipment and take continuous steps toward completion.
- The Physical Work Test – Begin physical work on site or off-site construction activities (e.g., pile procurement or racking fabrication).
Why Structural Systems Are the Smart Safe Harbor Option
Unlike modules or inverters, which risk obsolescence, structural components such as racking and trackers maintain long-term value. That makes them ideal for locking in ITC eligibility across a multi-year window.
At Polar Racking, we manufacture both fixed-tilt and single-axis tracker systems in North America. Our products are engineered for long lifecycle performance, FEOC compliance, and safe harbor compatibility.
Foundations Are Key — and We’re Ready in 2025
Starting construction often begins below ground. With geotechnical services and foundation supply available in 2025, we help developers meet “start of construction” thresholds earlier—especially valuable for projects where full procurement isn’t yet finalized.
Starting with the foundation gives developers:
A clear construction milestone
Documented project activity
Early compliance with ITC-preserving actions
Support for Industry-Standard Safe Harbor Practices
When pursuing the 5% Safe Harbor, a common practice is to:
- Commit ≥ 5% of project cost
- Begin manufacturing of structural components
- Complete title transfer and storage in a timely, documented manner
While no specific timeline is prescribed by the IRS, our team works with your advisors to align with industry-vetted practices for safe harbor compliance.
*Clients should consult their own tax counsel to validate timing and documentation for their specific project.
*Clients should consult their own tax counsel to validate timing and documentation for their specific project.We support this approach by:
- Providing clear title transfer documentation
- Offering secure storage options
- Coordinating delivery expectations consistent with recognized safe harbor strategies
Compliance Without Compromise: FEOC-Ready + Bonus Eligibility
With Foreign Entity of Concern (FEOC) restrictions taking effect in 2026, any solar hardware linked to China, Russia, Iran, or North Korea will risk ITC disqualification.
Polar Racking’s systems are:
U.S.-manufactured
Fully FEOC-compliant
Eligible for ITC bonus programs such as:
- Domestic Content Adder
- Energy Community Bonus
- Low-Income Adder (where applicable)
Key Advantages of Safe Harboring with Polar Racking
Preserve ITC eligibility before August rule changes
Maintain compliance for 2026 COD projects
Start with geotech and foundations in 2025
Use trusted structural systems that won’t go obsolete
Align with safe harbor best practices
Minimize risk with clear documentation and U.S. supply chain
Want to Learn More About Foundations That Qualify for Safe Harbor?
Discover how Polar Racking’s North American-made foundation solutions—available in 2025—can help you meet the “start of construction” threshold faster. From geotech to piles, we’re ready to support your ITC strategy from the ground up.
👉 Read our Foundations Blog
Discover how Polar Racking’s North American-made foundation solutions—available in 2025—can help you meet the “start of construction” threshold faster. From geotech to piles, we’re ready to support your ITC strategy from the ground up.
👉 Read our Foundations Blog
Ready to Safe Harbor Your Pipeline?
Whether you’re finalizing procurement or just getting started, our team can help you lock in your tax credit eligibility with confidence. We’ll walk you through product selection, safe harbor documentation, and foundation strategy—so you’re ready to move when construction begins.
Contact us to discuss a safe harbor strategy tailored to your portfolio.