The December 2027 deadline
Lease and PPA systems must be placed in service by 2027-12-31 to qualify for the 30% commercial credit. That phrase does a lot of work, and it is not the same as signing a contract.
Roughly 17 months remain
Placed in service means installed, inspected, interconnected and running. Between a signature and that state sit permitting, an installation queue, an inspection and utility permission to operate — a sequence that routinely takes two to six months, and longer in congested markets.
Why the wording matters
Tax credits attach to the placed-in-service date, not the contract date. This already caught out households whose systems were signed in 2025 but energised in 2026: they lost the residential credit entirely, because §25D turned on when the system started operating.
The same logic applies here. A lease signed in late 2027 whose system is energised in early 2028 does not qualify, and the pricing you were quoted was built on the assumption that it would.
What already closed
The begin-construction safe harbour for these projects closed on July 4, 2026. Projects underway before that date locked in a longer pathway. Anything starting now is generally working to the placed-in-service deadline.
How to use this without being rushed
There is a genuine constraint here and there is manufactured urgency layered on top of it. Separating them:
- Genuine: if you want a lease or PPA priced with §48E in it, the system needs to be running before the end of 2027. Working backwards through permitting and interconnection, a decision through most of 2027 is still comfortable.
- Manufactured: any pitch in 2026 that says you must sign this week. You have well over a year. A salesperson compressing that is telling you something about their pipeline, not about the tax code.
Ask for the date in writing
If a quote's economics depend on §48E, the contract should commit to a placed-in-service date and say what happens if the provider misses it. If they will not put that in writing, the credit they are pricing in is your risk, not theirs.
Common questions
What exactly has to happen by December 31, 2027?
The system has to be placed in service — installed, inspected, interconnected and operational. A signed contract does not qualify. Neither does an installed array still waiting on utility permission to operate.
What was the July 2026 safe harbour date?
The begin-construction safe harbour for these projects closed on July 4, 2026. Projects that had begun construction on or before that date locked in a longer timing pathway. New lease and PPA projects starting now generally must meet the placed-in-service deadline instead.
Is this a real deadline or a sales tactic?
Both, and it is worth separating them. The statutory date is real. The urgency layered on top of it by a salesperson in mid-2026 is not — there is time. Treat a "sign today or lose 30%" pitch as a reason to slow down, not speed up.
What happens to leases and PPAs after 2027?
Without §48E the economics of third-party ownership change materially, since the credit is a significant input into the pricing offered today. What the market looks like after that is speculation, and we will not pretend otherwise.
Related: what happened to the 30% credit, third-party ownership explained, and the buy vs. lease comparison.
This page explains public tax rules and is not tax advice. Confirm your own situation with a qualified tax professional.