On December 31, 2020, the IRS released Notice 2021-05 (the "Notice") on its website, in advance of its official publication. As discussed in our earlier blog post, the Notice provides favorable guidance for offshore renewable energy projects ("Offshore Projects") and renewable projects constructed on federal land ("Federal Land Projects") and generally allows these projects to be placed into service 10 calendar years after the calendar year during which construction began (the "10-Year Continuity Safe Harbor") without potentially jeopardizing the amount of the PTC (in the case of a wind farm) or the ITC (in the case of wind farm that elects the ITC or a solar project). Under the originally released Notice, only Offshore Projects and Federal Land Projects that require the construction of high-voltage transmission lines to connect the project to the U.S. electrical grid system are eligible for the for the 10-Year Continuity Safe Harbor.

On January 19, 2021, the Notice was officially published in the Federal Register. As one would expect, the published Notice is virtually identical to the released version, with one key difference. The officially published version of the Notice does not require an Offshore Project to include the construction of high-voltage transmission lines to connect the project to the U.S electrical grid system. The requirement, however, remains for a Federal Land Project. Interestingly, the Notice still explains that one of the justifications for the extended 10-Year Continuity Safe Harbor for Offshore Projects and Federal Land Projects is the longer development period due to the need to construct new transmission lines to connect the project to the grid, but apparently this justification is no longer a requirement in the case of an Offshore Project. Some industry participants were concerned about that requirement in the case of an Offshore Project, so perhaps the deletion of it in the officially published version was in response to these concerns.

Originally Published by Mayer Brown, January 2021

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2020. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.