When a business decides to go solar, one of the biggest motivators is the federal solar investment tax credit (ITC).
This credit helps offset a large portion of the upfront cost of a commercial solar project and covers 30% to 50% of your solar project costs.
Changes in the One Big Beautiful Bill add new regulations and deadlines, and claiming your solar tax credit now comes with a deadline. However, there’s a way to secure your project’s eligibility even if you aren’t ready to build: Safe harbor.
What Is Safe Harbor?
Safe Harbor is a federal provision that allows businesses to “lock in” today’s solar tax credit rate and regulations for future projects.
In simple terms, it freezes the current incentives and regulations regardless of future changes.
As long as safe harbor is in place and your project is completed within 4 years, your incentives are still available even if they get phased out.
Want to see what solar can do for your business? Start here, and we’ll take you through the process of evaluating your facility and if safe harbor is a good fit for your needs.
Why Safe Harbor Matters Right Now
In July 2025, Congress passed what many in the industry have called the One Big Beautiful Bill (OBBB) that made massive policy changes across the board.
For solar, the OBB made incentives more complicated with an escalated deadline and new regulations:
- Solar Tax Credits
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- Still covers 30% to 50% of your solar project costs
- Hard deadline for projects unless safe harbored
- All solar projects must be built, fully operational, and producing energy by Dec. 31, 2027, to qualify for solar tax credits
- Solar projects completed on or after Jan. 1, 2028, can’t claim any solar tax credits, and this includes those projects initiated prior to the deadline
- FEOC Regulations
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- New FEOC (Foreign Entity of Concern) regulations will take effect in early 2026
- Still awaiting final rules to be announced
- Expected to apply to a percentage of solar building material components sourced in countries such as China and Russia; it also applies to material made by companies by in these countries
- FEOC rules will inevitably raise material costs and create supply bottlenecks that make it harder and slower to complete projects in time
- Projects completed after FEOC goes into effect will also have increased regulatory hurdles to claim solar tax credits
By safe harboring in 2025, your business can protect its solar project from these changes.
Safe harbor secures your incentives and applies regulations as they exist at the time you finalize safe harbor. If you complete safe harbor in 2025:
- Complete construction by the end of 2029
- Avoid FEOC-related costs
- Maintain a predictable construction window
- Claim the 30% to 50% solar tax credit
How to Safe Harbor Your Solar Project
Artisun Solar has been in the commercial solar industry since 2011 and helped many of our 850 projects utilize safe harbor.
To complete the safe harbor process, you need two things:
- A signed contract for your solar project
- A 5% deposit
These are considered “beginning of construction” which officially locks in your project incentives for a full 4 years.
Once safe harbor is in place, new changes in Washington won’t apply to your project. Your project incentives and regulations are secure while you finish your project on your timeline.
Safe Harbor Timeline: Key Dates to Know
Let’s look at what the next few years mean for businesses considering solar.
Now through Dec. 31, 2025: The Safe Harbor Window
- Full solar tax credits available for four years
- Avoids FEOC material restrictions
- Allows for building to commence on your schedule
- Deadline for construction: 2029
Even if you’re not ready to build your solar system today, safe harbor is the best option you have. Many companies are securing contracts and safe harboring projects in 2025.
2026: New FEOC Rules In Effect, Safe Harbor Closes
- Safe harbor will only be available through July 4, 2026. After this date, all projects must apply to both FEOC regulations and the OBBB deadline of Dec. 31, 2027
- Projects safe harbored in 2026 will need to complete construction by 2030
- Once FEOC rules apply, any new safe harbor projects will be required to meet these new requirements
For projects that don’t safe harbor before the end of 2025, the cost and complexity of going solar are likely to increase in 2026.
2027: OBBB Solar Tax Credit Deadline
- Unless a project was previously safe harbored, solar projects will need to complete construction and produce energy by Dec. 31, 2027, to qualify for solar tax credits
- FEOC regulations will apply
- Expect longer construction timelines, potential equipment shortages, and higher costs
Projects that begin construction prior to Dec. 31, 2027, must still be fully operational and producing energy by this deadline to qualify unless it’s protected by safe harbor. Without the solar tax credit, your payback timeline doubles.
2029: Deadline for 2025 Safe Harbor Projects
- Get full solar tax credits if producing energy within 4 years of finalizing safe harbor
- FEOC regulations won’t apply
Because your Safe Harbor date locks in 2025’s tax credit rules, FEOC regulations won’t apply to your project materials, even though they’ll be in full effect industry-wide by then.
2030: Deadline for 2026 Safe Harbor Projects
- Get full solar tax credits if producing energy within 4 years of finalizing safe harbor
- FEOC regulations will apply and make it more difficult to claim the solar tax credits
Because FEOC regulations will apply, sourcing compliant materials may take more time and increase costs compared to projects protected under 2025 Safe Harbor rules.
The Cost of Waiting
Many business leaders are waiting to “see how things play out” before making a solar decision. That hesitation could be costly.
By 2026, when FEOC rules take effect:
- Equipment availability will likely tighten
- Construction schedules will stretch out
- Material prices could rise due to limited sourcing options.
We’re already seeing more companies moving to complete solar projects before the 2027 deadline. The solar tax credit plays a pivotal role, but it also helps them control utility costs that continue to increase.
Summing It Up: How Safe Harbor Protects Your Business
The Safe Harbor process was designed to give businesses certainty in an environment where policies and supply chains change quickly.
Here’s what Safe Harboring your project achieves:
- Locks in full solar tax credit eligibility. Your project qualifies for the 30% to 50% credit available in 2025, regardless of future policy changes.
- Avoids FEOC cost increases. Safe Harboring shields your project from the upcoming sourcing restrictions.
- Gives you time to plan. You can secure your incentive now and build later within a comfortable four-year window.
- Protects against construction bottlenecks. With many businesses racing to build before 2027, Safe Harbor ensures your project timeline stays under your control.
Safe harbor in 2025 is a tax strategy that protects the economics of your entire solar investment.
A Look Ahead
The solar industry is entering a period of rapid change. The OBBB reshaped how incentives work, and the upcoming FEOC rules will change how solar materials are sourced and priced.
For business owners considering solar, 2025 represents a critical window of opportunity.
By acting before the end of the year, you can lock in your project’s full 30% to 50% solar tax credit and avoid the uncertainty that will follow once FEOC rules are active.
Safe Harbor isn’t about rushing into construction. It’s about planning ahead, securing your incentives, and ensuring your solar project works on your timeline, not Washington’s.
Ready to Protect Your Project?
If you’ve been thinking about solar, now is the time to explore Safe Harbor options.
All it takes is a conversation to see how the rules apply to your project and how much of a tax credit you can still secure.
Artisun Solar can help you evaluate your facility, estimate your tax credit, and guide you through the Safe Harbor process. We’re a nationally ranked commercial solar installer trusted since 2011, and we know the ins and outs of incentives, regulations, and rules.
Let’s make sure your project qualifies while there’s still time. Get started here today to see if solar – and safe harbor – is a good fit for your facility.
Glossary of Key Terms
Solar Investment Tax Credit (ITC): A federal tax incentive that allows businesses to deduct a percentage of solar project costs from their taxes. Current rates range from 30-50%.
Safe Harbor: A legal provision that lets a business secure today’s solar tax credit by signing a contract and paying a 5% deposit, even if construction begins later.
FEOC (Foreign Entity of Concern): A federal classification for countries such as China that affects how solar components sourced from those countries are treated under U.S. incentive programs.
Energized: A project is “energized” when it’s connected to the electrical grid and producing electricity.
Tax Credit Deadline: The date by which a project must be completed and energized to qualify for federal solar tax credits (December 31, 2027, for non–Safe Harbored projects).
