The One Big Beautiful Bill (OBBB), signed in July 2025, accelerated the phase-down of federal solar tax credits. Treasury’s clarifications made one thing clear: safe harboring your solar project is now the most important lever for preserving the full 30% federal Investment Tax Credit (ITC), plus any eligible adders.

For commercial property owners, the stakes are high. Capturing these incentives can significantly reduce operating expenses and boost net operating income. Because commercial solar projects often take months to design, permit, and construct, the time to act is now.

Safe harboring allows you to lock in this year’s tax credit rate, even if your system isn’t completed or in service yet. You secure the credit by either:

• Incurred Cost Method: Paying at least 5% of project costs on qualifying equipment (modules, racking, inverters). Best practice is closer to 10% to avoid scope-change risk.

• Physical Work Test: Beginning “work of a significant nature” on-site (installing racking, foundations) or off-site (manufacture of racking, transformers, inverters, etc.). Work must continue consistently until the project is placed in service.

Size Thresholds Matter

• Under 1.5 MW: Either 5% cost method or physical work qualifies (until July 4, 2026).

• Over 1.5 MW: Must use the physical work test between Sept 2, 2025 and July 4, 2026.

CPKC Stadium Took Advantage of the 30% Tax Credit to Help Pay for its Solar Installation in 2024

A new wrinkle: the OBBB also introduced Foreign Entities of Concern (FEOC) restrictions, effective 2026. These rules will limit tax credit eligibility for projects sourcing materials from other countries. The IRS will release formal FEOC guidance in 2026, but the bottom line is clear: projects not safe harbored before January 1 risk losing access to full credits.

• Maximize Incentives: 30% base credit + potential adders.

• Protect Against Policy Risk: Lock in favorable rules before FEOC restrictions tighten.

• Accelerate NOI Gains: Lower operating costs with predictable energy savings.

The commercial solar landscape is changing fast, but the math is still compelling. Safe harboring ensures your project qualifies for maximum incentives while you finalize design and construction.

Good Energy Solutions installed solar on 12 Commerce Bank locations in 2019.

Good Energy Solutions has been helping commercial business owners in Kansas and Missouri reduce energy use and lower their energy costs with energy efficiency measures and solar since 2007.

With electricity being one of the largest expenses for most businesses, solar helps stabilize your bottom line. As your company continues to grow, it will inevitably consume more energy for lighting, HVAC, production, computing, and other business needs. Solar can help you combat rising energy prices and manage your budgets.

Paired with federal tax incentives, special grant programs for qualifying companies, and depreciation benefits, Good Energy Solutions can help your business achieve energy independence while maximizing the return on your investment.

We make the cost of solar for your business or farm cash-flow positive. Good Energy Solutions can install a solar electric system that will actually cost less than what you are currently paying for power and energy.

At Good Energy Solutions, we believe the best energy gained is the energy you don’t use. As the cost of conventional electricity continues to rise, a commercial solar array can help lock in what you pay for power every month. Once your system is paid off, you can expect your monthly electricity bills to drop dramatically.

We recommend battery energy storage systems to companies that want to reduce peak demand by storing energy during off-peak hours and releasing it during peak hours. This process is called peak shaving, and it can save money on electricity bills.

Installing energy storage with solar panels provides several advantages for your business. A battery allows you to store excess solar energy generated during the day and use it during peak hours when electricity rates are higher. Storing surplus solar energy instead of sending it back to the grid helps maximize your return on investment. It can also help maintain operations during power outages by using stored energy as a backup.

A Commercial Battery System Designed & Installed by Good Energy Solutions

Good Energy Solutions has been designing and installing commercial solar since 2007. Our NABCEP-certified team has navigated multiple federal and state policy shifts, and we specialize in structuring projects to capture every available incentive.

Contact our commercial advisors today to discuss safe harbor options for your property.