Author: Chandreyi Datta

ITC Is Reshaping Commercial Solar Timelines

For most of the past two decades, the Federal Investment Tax Credit (ITC) has helped make solar a straightforward financial decision for commercial property owners. Incentives were stable, and project timelines were relatively flexible. That environment has changed. With the solar tax credit now in Phase 2, the timing of when a project is contracted plays a larger role in project economics, development timelines, and execution risk. Here are the key Fed ITC takeaways for property owners.

Fed ITC: Key Takeaways for Property Owners

Key Takeaways – Solect
ITC Phase 2 is active
Since Jan 1, 2026; full 30% credit still available via Safe Harbor for qualifying projects
Jul 4, 2026
Phase 2 contract deadline
Contract by this date; place in service by Dec 31, 2030
Dec 31, 2027
Phase 3 HARD deadline
Contract after Jul 4, 2026; must complete by this date
Earlier = Better
Contracting sooner improves outcomes
Stronger interconnection queue position, more project flexibility, better financial results
All Financial Structures
Rules apply across all financing types
PPAs, site leases, and direct ownership: same ITC timing for all

Solar Development in ITC Phases 2 and 3: Timing Matters

Solar projects remain viable across multiple financial structures, including PPAs, solar site leases, and direct ownership. Projects contracted on or before July 4, 2026 can benefit from a longer development timeline, allowing more time to complete permitting, interconnection, financing, and construction. Projects contracted after July 4, 2026 can still move forward successfully when key conditions are already in place, such as a rooftop ready for installation, available grid interconnection capacity, and access to ITC-eligible equipment. However, when those factors require additional time to address, contracting before July 4 can reduce investment risk by allowing projects more time to be completed.

Here’s how project timing now has a more direct influence on the planning, pricing, and execution of solar projects.

Solar ITC Project Timelines – Solect
Safe Harbor Threshold — July 4, 2026
Now Contract window open
July 4, 2026 Safe Harbor deadline
Dec 31, 2027 Phase 3 completion deadline
Dec 31, 2030 Phase 2 completion deadline
Phase 2 Contract on or before July 4, 2026 Phase 3 Contract after July 4, 2026
ITC Outcome
Full 30% ITC
If Safe Harbor requirements are met
ITC may still apply
Some projects can still qualify
Completion Deadline
Placed in service through
December 31, 2030
Placed in service by
December 31, 2027
Development Window
Up to ~4.5 years
More flexibility for complex projects
~18 months or less
Tighter execution timeline
For commercial property owners, the difference between these timelines does not eliminate opportunity, but it does influence development flexibility, pricing assumptions, and overall execution risk. Developers that actively track federal policy changes and proactively address equipment sourcing can help translate these timelines into practical project strategies.

Another Timing Consideration: Interconnection Queues

Beyond tax credit timelines, another important factor is access to available grid hosting capacity.

Solar projects must secure approval from the electric utility before connecting to the grid. In many regions, interconnection queues have grown as more projects seek access to available grid capacity. When an interconnection application is submitted, the project is placed in the utility’s queue for review and approval. Projects that contract earlier can submit interconnection applications sooner, improving the likelihood of securing available capacity and reducing the risk of development delays.

For commercial property owners, this means contract timing influences how quickly a project can realistically move from development to being placed in service.

Contract Timing and Solar Project Economics

ITC has long been a major driver of solar project economics. As the incentive structure evolves, timing becomes a more significant factor in how projects are structured and priced.

Power Purchase Agreements (PPA)

Longer Timeline → Full ITC

Developers can typically offer more competitive long-term electricity pricing under a PPA.

Shorter timeline · Higher risk

Project risk increases and may be reflected in:

  • Higher electricity pricing
  • Adjusted escalation assumptions
  • More selective site requirements

Solar Site Leases

Longer Timeline → Developer confidence

Developers have greater flexibility to offer higher lease income to property owners.

Shorter timeline · Less flexibility

Shorter timelines can reduce that flexibility and limit the number of sites that support viable project economics.

Direct Ownership (Owner-purchased)

Full ITC retained
30% reduction in project cost, improving payback periods and long-term returns
Shorter timeline · Greater exposure

Delays from permitting, interconnection, or equipment availability can have a greater impact on financial outcomes.

Factor
Phase 2 | On or before July 4, 2026
Phase 3 | After July 4, 2026
PPA pricing
More competitive rates
Higher pricing likely
Lease income
Higher potential income
Reduced flexibility
Project cost
30% ITC savings
Delay risk amplified
Site options
Broader site eligibility
More selective criteria

Safe Harbor, Equipment Sourcing, and FEOC Compliance: Preparation Matters

What Safe Harbor Means for Solar Projects

Safe Harbor provisions allow solar projects to preserve eligibility for the ITC if a portion of project costs—typically at least 5 percent of total project value—is incurred before the applicable deadline and the project meets required placed-in-service timing and compliance conditions. This allows projects to retain tax credit eligibility even if construction and commissioning occur later, with qualifying projects able to be placed in service as late as December 31, 2030.

How Equipment Sourcing Is Becoming More Important

Beginning in 2026, federal Foreign Entity of Concern (FEOC) rules introduce additional requirements regarding the source of certain solar equipment and components. Under these regulations, solar equipment manufactured by entities classified as Foreign Entities of Concern, or supplied by companies owned by Prohibited Foreign Entities, may not qualify for the ITC (refer to IRS guidance for further details).

As a result, for property owners, equipment sourcing now affects project eligibility timelines and expected financial outcomes. It makes it increasingly important for developers to have visibility into compliant supply chains and access to ITC-eligible equipment.

Early Preparation Callout – Solect

Why early preparation helps reduce risk

As Safe Harbor and FEOC requirements affect both project timing and equipment sourcing, projects that begin planning earlier retain greater flexibility in development schedules.

Investors and some developers have already taken steps to secure supply contracts for compliant equipment and establish procurement strategies that support ITC eligibility. Developers like Solect, with established supply relationships and the balance-sheet capacity to secure compliant equipment, are better positioned to maintain project timelines and preserve expected financial outcomes.

Solar Project Evaluation – Solect

What Property Owners Should Evaluate Before Starting a Solar Project

For commercial and institutional decision-makers, the most productive next steps are strategic rather than transactional. An initial evaluation can quickly determine whether a building is a strong candidate for solar.

01
Evaluate Building Readiness
Is the site a strong candidate?
  • Roof condition Newer roofs move through development more smoothly
  • Available square footage Sufficient space for the intended system size
  • Electrical infrastructure Existing capacity and upgrade requirements
  • Long-term ownership plans Stable ownership supports stronger project economics
02
Assess Interconnection & Hosting Capacity
Can the project connect to the grid?
  • Local grid conditions Influence on connection feasibility and speed
  • Early interconnection review Determines whether sufficient hosting capacity exists
  • Utility queue position Earlier contracting improves the likelihood of securing capacity
  • ITC eligibility alignment Whether timelines support Safe Harbor requirements
03
Understand Internal Decision Timelines
Will approvals fit within incentive deadlines?
  • Capital planning cycles Budget timelines that must align with project contracting
  • Procurement reviews Often take longer than expected; plan early
  • Board approvals Sign-off requirements that affect contracting speed
  • ITC deadline awareness July 4, 2026 threshold to preserve the full 30% incentive
These factors are typically evaluated early in the development process to determine whether a site is well-positioned to move forward.

A Narrower Window, But Still a Clear Opportunity

Federal solar incentives are evolving, but they remain available for projects that align with current timelines. Solect Energy has secured supply contracts for ITC-compliant equipment through 2030. With these resources, Solect works with property owners across both timelines and advises clients on strategies aligned with their building conditions, project goals, and development schedules.

To explore solar for your property, schedule a consultation.

Call 508-598-3511, email info@solect.com, or use the button below. It could be one of the best financial decisions you make today.

Check Solar Feasibility

Rooftop Solar Site Leases: TBD

Commercial real estate owners increasingly focus on maximizing asset performance by driving net operating income (NOI) and positioning properties to remain competitive as market conditions evolve. One opportunity gaining traction is converting unused rooftop space into a long-term revenue stream through a solar site lease.

Rooftop Solar Site Lease — At a Glance

  • Investment required: None
  • Revenue source: Lease payments from a solar developer
  • Typical lease term: 20–25 years
  • Impact on NOI: Increases NOI with predictable, long-term income
  • Upfront payment option: Available in some cases for roof or capital improvements
  • Ownership & operations: System owned, operated, and maintained by the developer
  • Ideal building size: 30,000+ square feet of usable roof space
  • Best-fit property types: Industrial, warehouse, flex, distribution, large retail
  • Effect on tenants: Minimal disruption; no impact on interior space
  • Property sale: Lease is typically transferable to a new owner

What Is a Rooftop Solar Site Lease?

A rooftop solar site lease is a third-party ownership arrangement. In this model, a solar developer leases roof space from a building owner and then finances, builds, owns, and operates a solar array on that roof for its full useful life which is typically 20 to 25 years. The property owner continues to own and operate the building as usual, while receiving lease payments for the rooftop space. The solar developer assumes responsibility for all aspects of the system, from design and construction through long-term operation and maintenance.

From a commercial real estate perspective, solar functions much like a long-term tenant occupying space that would otherwise generate no income.

What Is the Investment Required?

None. Under a rooftop solar site lease, there is no upfront capital investment required from the property owner. The solar developer covers all project costs, including engineering, permitting, construction, interconnection, and monitoring and maintenance.

For owners seeking new revenue streams without deploying capital or increasing operating complexity, this structure offers a rare combination: predictable income with no balance sheet impact.

Solar as the Ideal Long-Term Tenant

When evaluated using traditional commercial real estate criteria, a rooftop solar tenant performs exceptionally well:

  • Lease terms typically span 20–25 years
  • Lease payments are predictable and contractually defined
  • The system occupies unused roof space only
  • There is no impact on interior square footage, parking, or tenant operations
  • No turnover risk and no tenant management issues

In an unpredictable leasing environment, few tenants offer this level of stability.

NOI Impact and Long-Term Asset Value

Rooftop solar lease payments directly increase NOI, which can enhance asset value depending on capitalization assumptions. Because the income stream is long-term and contractual, it is often viewed as low-risk and high-quality revenue. For portfolio owners, rooftop solar site leases can improve property-level cash flow, diversify income sources, and enhance appeal to buyers and lenders seeking stable returns. Importantly, solar revenue is additive. It does not interfere with existing leases or future tenant strategies

Why Timing Matters for Rooftop Solar Leases

Recent changes to federal solar incentives have altered the flexibility of project timelines. To qualify for the full 30% Investment Tax Credit (ITC) and secure the most favorable lease terms, timing is now a critical factor. Under current “Safe Harbor” provisions, projects that are contracted before July 4, 2026, can benefit from an extended development window, with a “placed-in-service” deadline as late as December 31, 2030. In contrast, projects contracted after July 4, 2026 must be operational by the end of 2027 to qualify. Later contracting does not eliminate opportunity, but it reduces flexibility.

We chose Solect due to their approach to understanding our commercial property management needs and leveraged their solar expertise to deliver a clean energy solution aligned with our operational and financial requirements.
— Doug Freeman Principal, Capital Group Properties

Which Properties Are Best Suited for Rooftop Solar?

While each site is evaluated individually, strong candidates typically include:

  • 30,000+ square feet of usable roof space
  • Structurally sound roofs with sufficient remaining life
  • Industrial, warehouse, flex, distribution, or large retail properties
  • Long-term site control and stable ownership

Many owners are surprised to learn that rooftops already meeting these criteria can generate meaningful revenue with minimal effort.

Upfront Lease Payments for Capital Improvements

In some cases, rooftop solar site leases can include an upfront lease payment, paid at the beginning of the contract term. This upfront revenue may be used to offset roof replacement or repairs, address deferred maintenance, or fund capital improvements that increase tenant appeal

In effect, the solar tenant can contribute to improving the building before the system is installed, aligning the project with long-term asset needs.

Leasing Your Rooftop to Solect Energy

Solect Energy works with commercial property owners across the Northeast to transform underutilized rooftops into reliable, long-term revenue-generating assets.

Solect manages the full process—from feasibility and engineering through financing, construction, interconnection, and long-term operations. This allows building owners to benefit from solar without taking on risk or complexity.

For owners looking to improve asset performance, a rooftop solar site lease offers a straightforward opportunity: a dependable tenant, predictable income, and no capital investment.

Does Your Rooftop Qualify for a Solar Site Lease?

Schedule a brief conversation to find out. Call 508-598-3511, email info@solect.com, or use the button below. It could be one of the best financial decisions you make today.

Continue Reading

More From Our Blog

RE+ Northeast


RE+ Northeast
February 12 – 13, 2025 | Boston Convention & Exhibition Center, Hall A

As the solar landscape continues to expand across the Northeast, there’s never been a better time to explore collaborative opportunities and contribute to the broader growth of the renewable energy industry.

Solect Energy, a leading commercial solar and energy storage developer in the Northeast, has been delivering solar solutions—from PV to EV—for a wide range of commercial sectors, including C&I, CRE, municipalities, nonprofits, and beyond.

If you own or manage a portfolio of commercial properties and are considering solar, connect with our team to assess your solar potential. If your business operates in the renewable energy sector and you’re exploring collaborative opportunities, we’d love to meet you as well. Our Strategic Partner Services create meaningful value for our partners and the communities we serve. Either way, we look forward to an engaging conversation with you at the upcoming RE Plus Northeast!!

Our team will be at the event to share insights and expertise on a range of topics, including the following and beyond:

  • Asset and Fleet Management
  • Technical Services
  • Strategic Partner Services (Development, Financing, and Construction)
  • Domestic Content Solutions
  • Storage and Interconnection
  • Northeast Policy, Industry Coalitions, and Workforce Development

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

NEWIEE’s 2024 Annual Members Meeting and Fall Fête


Thursday, November 7, 2024 | The Engine in Cambridge, Massachusetts

Join Team Solect at the Annual Members Meeting and Fall Fête—a vibrant evening of engaging conversations, networking, knowledge-sharing, and camaraderie. We’re excited to connect with industry peers, partners, and long-standing friends as we come together to discuss innovative strategies for advancing the green revolution and accelerating the region’s journey toward carbon neutrality. Let’s celebrate progress, collaboration, and the future of sustainable energy!

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

Annual Western, MA / Connecticut CRE State of the Market



A 2024 New England Real Estate Journal Summit

Nov 6, 2024 | MGM Springfield; Springfield, MA | 8:30am – 11:30am EST

Join Solect Energy SVP Scott Howe as he brings his extensive expertise in renewable energy to the 2024 NEREJ Annual Western MA / Connecticut CRE State of the Market Summit. With a career defined by innovation and leadership in the energy sector, Scott will share valuable insights that shape the future of commercial real estate across the Northeast.

The summit will tackle key issues affecting the Western MA and CT CRE landscape, with a special focus on transactions, regional projects, and financing strategies. Critical topics like sustainability, energy transition, and increasing power demand will also be explored, along with solutions to environmental challenges.

Don’t miss this opportunity to gain expert knowledge from one of the industry’s leading voices.

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

GridTECH Connect Forum Northeast



A conversation on interconnection and

advancing clean-energy goals

October 28-30, 2024 | Newport Marriott, Newport, RI

Catch Solect SVPs Alex Keally and Matt Shortsleeve at the GridTECH Connect Forum Northeast this month as they discuss interconnection and advancing clean energy goals!

Despite New England’s progress toward 100% renewable energy, several key challenges remain, including the intermittent nature of wind and solar, limited space for large-scale projects, and increasingly severe weather conditions. The region needs to modernize its grid to integrate distributed energy resources, manage peak demand, and address the growing “duck curve”, while inconsistent policies and regulations across states continue to hinder advancement. This conference provides a valuable platform for insightful discussions on these critical issues and more.

Use promo code SPKGUEST for $50 off registration. Let’s drive the future of clean energy together!

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

Transit Housing on the Rail

A New England Real Estate Journal and MSCC Housing & Transit Summit

October 17, 2024 | Showcase Cinema de Lux; Randolph , MA | 8:30 am – 11:30 am

Join Team Solect at this exciting event focused on Opportunity Zones, new housing developments, transportation, infrastructure enhancement, and the future of the Metro South region. It features a panel discussion driven by regional leaders from organizations like MassDOT, Bridgewater State University, the Citizens’ Housing and Planning Association (CHAPA), the Brockton Area Transit Authority, and more.

Don’t miss this opportunity for an engaging discussion over a complimentary breakfast, followed by a networking session to connect with industry veterans and thought leaders.

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

See Yourself in the Green Workspace: Explore, Share & Network!

By the MetroWest STEM Education Network and
Christa McAuliffe Center

Wednesday, October 23, 2024 | Christa McAuliffe
Center, Framingham State University | Between 3:30pm-6:00pm

Attention high school and college students, aspiring professionals, parents, educators, and mentors!

Join Team Solect and discover exciting career opportunities in the fast-growing renewable energy industry. Learn how you can make a meaningful impact by contributing to the advancement of green energy and driving the world toward a sustainable, greener future. Let’s work together to shape tomorrow’s energy landscape!

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

Mastering USDA REAP Grants: Join Our Webinar

How to Win a USDA REAP Grant: A Guide for Maine and New Hampshire Businesses

Thursday, Aug 15th, 2024, 10:00 am – 10:30 am | Free

USDA REAP funding is at an all-time high, with 95% of Maine and New Hampshire qualifying as eligible areas—and the best part is agricultural use isn’t required.

Join our free webinar to learn the key steps to secure a USDA REAP grant, including eligibility, application scoring, and timelines. We’ll also cover additional federal and state incentives to help further reduce your project costs.

Gain insights from Solect’s experienced team–featuring senior directors Andrew Hickok and
Ted Rioux–and optimize your chances of success. Don’t miss out on this opportunity for significant funding—register today!

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

8th Annual Northern New England CRE Summit

by New England Real Estate Journal (NEREJ)

Wed, Aug 14th, 2024, 8:30 am – 11:30 am | The Venue at the Portwalk, Portsmouth, NH

With the commercial real estate industry evolving at an unprecedented pace, join us at the 8th Annual Northern New England CRE Summit to explore the key driving forces defining the industry’s present and future.

Solect senior executives, Scott Howe and Ted Rioux will be there to meet with you at the summit and offer their extensive industry insights on the importance of solar adoption highlighting its environmental benefits and the significant savings potential it offers for your CRE business in today’s market.

Additionally, the summit brings together some of the industry’s top leaders to discuss a range of critical issues including the following:

  • Market overview
  • Interest rates
  • Availability of financing
  • 1031 exchanges
  • Construction trends
  • Supply chain issues
  • Engineering trends

As one of the Northeast’s leading commercial solar developers, Solect Energy specializes in designing and developing solar and bettery energy storage systems tailored to meet our customers’ unique needs, challenges, and savings objectives. Explore our diverse portfolio to see some of the significant projects we’ve developed for some of the region’s leading CRE brands.

Visit our table for in-depth discussions with our team over a complimentary breakfast buffet.

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

Mid-Maine Chamber of Commerce Business to Business Showcase (booth 72)

Tuesday, May 21, 2024 | 12 – 6 p.m |
Thomas College, Field House; Waterville, ME

Controlling energy expenses has become a pressing challenge in today’s business landscape. With energy consumption rising steadily, exploring effective solutions to address its financial impact without further ado is essential. Additionally, amidst the escalating climate crisis, it’s our responsibility to embrace sustainability practices for a healthier and greener future. Thankfully, the answer is simple: solar and battery energy storage systems (BESS).

By harnessing clean energy, your business can bolster savings, advance its sustainability initiatives, foster a cleaner economy, and elevate its brand reputation in the industry.

As a premier commercial solar and energy storage development company in the Northeast, Solect Energy is noted for crafting tailored solar and BESS solutions for businesses, commercial and industrial entities, as well as public and nonprofit organizations, spanning over a decade. Our seasoned team is dedicated to designing the optimal solar and storage solution according to your unique challenges, expectations, energy consumption patterns, available spaces, financial considerations, and more.

Let’s discuss how your business can further improve savings and optimize your sustainability objectives.

For inquiries, please feel free to reach out to us.

Explore the event page for more.

Aligning Education with STEM Workforce Needs

June 5, 2024, 8:30 am to 10: 30 am | MassBay Community College, Framingham, MA

Join us for a dynamic panel discussion hosted by Solect Energy in collaboration with MSEN (MetroWest STEM Education Network), Framingham State University, and MassBay Community College on June 5 at the MassBay Community College campus in Framingham, MA.

As a leading commercial solar developer, Solect Energy is powered by a dedicated team of industry experts and visionary leaders who recognize the critical link between education and the future of our workforce. We are committed to nurturing tomorrow’s professionals with the guidance and training they need to propel advancements in science and technology for years to come.

The panel discussion explores strategies for equipping our students with the skills and expertise necessary to drive sustainable scientific and technical growth crucial for enhancing the clean energy sector further.

Learn more about this event and reserve your spot by clicking here.

But that’s not all – explore the rooftop solar project and solar canopy developed by Solect Energy at the MassBay Community College campus in Framingham, with a combined production capacity of 442 kW. Let’s discuss how embracing solar energy can not only lead to significant cost savings but also make a powerful statement about your commitment to sustainability.

Have questions? write to us at info@solect.com, and we’ll be sure to get back to you promptly.

Annual Summit on Maine’s Economy & Climate Change

May 9th, 2024, 8am to 5pm | Augusta Civic Center, Augusta, Maine

Solect Energy, one of the leading commercial solar developers in the Northeast, is thrilled to participate in the forthcoming Annual Summit on Maine’s Economy & Climate Change.

At Solect, we deeply understand the pressing need to combat climate change, which inspires our commitment to developing a cleaner, greener, and more sustainable future. By championing the widespread integration of solar energy solutions, we actively contribute to mitigating carbon emissions while empowering our clients to unlock substantial savings and achieve remarkable returns on their solar investments.

Join our team at the upcoming conference and let’s discuss how to implement the necessary changes essential for a greener and cleaner Maine while mitigating the impact of climate change.

Questions? Feel free to write to us at info@solect.com.

Drop us a line here for a one-on-one discussion with Team Solect during or after the event.

MMA Boston, January 19th – 20th, 2024

MMA Boston, January 19th – 20th, 2024

Visit Us at Booth 606!

The 45th MMA Annual Meeting & Trade Show

Hynes Convention Center and Sheraton Boston

The time has never been better to consider solar adoption thanks to a number of stimuli, including the Green School Works grant (that pays K-12 public schools for roof replacement to foster clean energy projects), direct pay, and SMART incentives.

Additionally, it’s crucial to take proactive measures to comply with decarbonization mandates in alignment with the state’s commitment to achieving carbon neutrality by 2050.

Let’s discuss how team Solect can help you optimize your savings and sustainability goals with the ideal solar and energy storage solution.

Come see us at booth 606 and don’t forget to drop your business cards for a chance to win two tickets to Boston Red Sox or Worcester Red Sox games. See you there!

For any questions, drop us a line here.