Navigating solar tax credits, FEOC regulations, and federal incentives can be confusing, and we’re here to help. We work exclusively in commercial solar and can make this process simple.
Right now, it’s the best case scenario for commercial solar:
- Get up to half of your project covered with solar tax credits
- Building material is at an all-time low
- Utility rates are at an all-time high (and climbing)
- New FEOC regulations don’t apply
However, the tides are about to shift which makes a process called safe harbor a powerful tool to protect your project and build without racing new red tape.
This guide answers the most common questions about safe harbor, including costs, timelines, eligibility, and how to protect your financial benefits in a changing solar landscape.
If you need additional information or have more questions, contact us here. Our team will reach out to get you the answers you need.
What is safe harbor?
Safe harbor lets businesses lock in current solar incentives and regulations. Once a project is safe harbored, you have four years to build and still qualify for today’s financial benefits.
Safe harbor is becoming increasingly popular thanks to changes implemented in the One Big Beautiful Bill:
- Solar Tax Credits: Projects completed and energized by Dec. 31, 2027 can receive 30-50% in tax credits. Starting Jan. 1, 2028, solar tax credits will no longer be available.
- FEOC Regulations (Coming in 2026): New rules may limit tax credits for projects using materials with components from certain foreign entities, including China and Russia. Final rules have yet to be released, but Artisun Solar is working closely with our suppliers.
Here’s what safe harbor means for your project:
If you safe harbor before FEOC takes effect in early 2026, you avoid FEOC regulations and maximize tax credits. Build your project by 2029.
If you safe harbor after FEOC takes effect, your tax credits will still be protected but the process to claim them will become more complex. Build your project by 2030.
Does safe harbor cost extra?
No. Safe harbor is available for all projects with a signed contract and a 5% deposit for most projects.
Larger projects may have additional requirements, but our team can walk you through the details. The majority of our solar projects fall below the threshold to require additional requirements.
Why should I safe harbor in 2025?
Safe harboring in 2025 gives you four years to complete your project under current regulations. If you safe harbor in 2025, you have until 2029 to complete construction.
By securing safe harbor before FEOC rules go into place, your project won’t need to comply with new regulations. You can receive full solar tax credits with no new regulatory hurdles.
What happens if I wait until 2026?
Safe harboring in 2026 gives you until 2030 to complete construction. However, while you can qualify for full solar tax credits, your project will need to comply with FEOC requirements that are in effect.
This will increase material costs and make claiming credits more complex. While not impossible, we’re advising all clients to safe harbor in 2025 to keep their projects streamlined.
Will safe harbor always be available?
No. Safe harbor is only available through July 4, 2026.
After that, all solar projects must be fully constructed and operating by Dec. 31, 2027 for full tax credits unless previously safe harbored.
FEOC regulations will apply for projects completed in 2026 and 2027.
What if I don’t use safe harbor?
Without safe harbor in place, solar projects must:
- Comply with FEOC regulations for all building materials
- Be fully operational by Dec. 31, 2027 to claim 30-50% solar tax credits
As more businesses move to solar, construction timelines to meet this deadline are going to lengthen considerably. If your project is completed on or after Jan. 1, 2028, solar tax credits will no longer be available.
Why do I need solar tax credits?
Solar is a 30-year asset that helps businesses control energy costs and meet sustainability goals.
Solar tax credits cover 30-50% of project costs, and dramatically shorten your payback timeline.
- With federal solar tax credits: Many businesses see a return in 5 years or less
- Without federal solar tax credits: Payback timelines double, e.g., a 3-year return could become 6 years
Can I safe harbor a ground-mount solar system?
Yes. Safe harbor applies to both ground- and rooftop-mounted systems.
Why does FEOC matter?
FEOC affects building materials made with components from foreign entities of concern, including China and Russia. It also applies to material built by companies based in these countries.
Once FEOC rules are in effect in early 2026, all materials will be required to meet these standards. This includes for projects completed or safe harbored after the rules go into effect.
- This will impact sourcing, cost, and make claiming tax credits more difficult
- Safe harboring in 2025 avoids FEOC regulations entirely
Artisun Solar is working closely with our suppliers to ensure we can communicate what our clients can expect.
Can I combine safe harbor with other incentives?
Yes. Safe harbor can be combined with USDA REAP and other programs.
It’s also important to note:
- Safe harbor only applies to federal policies, like federal solar tax credits
- State or local incentives that end before your project completion won’t be protected
For example, safe harbor protects your solar project against changes in federal policy. Federal solar tax credits will be eliminated after 2027, and safe harbor freezes your incentives for an additional 2-3 years depending on when you safe harbor.
Safe harbor doesn’t apply to local or state policy changes, such as utility-specific rebates or state solar tax incentives.
Is there a system size requirement?
New rules (Sept. 2025) apply to projects 1.5 MW AC or larger measured after inverter conversion from DC to AC. If you don’t speak in megawatts, this means that larger projects will have additional requirements to complete safe harbor.
Most of our clients have projects smaller than 1.5 MW (AC) and will be able to secure safe harbor with a 5% deposit and signed contract.
Our team will guide all projects through safe harbor requirements and answer any and all of your questions. Get started here to see if solar is a good fit for your business and if safe harbor is a fit for your project timeline.
