The U.S. Treasury Department and the Internal Revenue Service (IRS) have issued new guidance tightening the "beginning of construction" requirements for wind and solar energy projects to qualify for federal tax credits under the Inflation Reduction Act and related legislation. The updated rules eliminate the previously available 5% safe harbor provision for wind and solar facilities, which allowed developers to meet the construction start requirement by spending at least 5% of the project's total cost. However, the physical work test remains intact as a method to demonstrate the start of construction. These changes are part of the IRS Notice 2025-42 and other related guidance documents responding to the July executive order and the One Big Beautiful Bill Act (OBBBA). The revised standards narrow the criteria for qualifying for the Production Tax Credit (PTC) and Investment Tax Credit (ITC), making it more difficult for solar and wind projects to secure these incentives. The guidance aims to clarify the timing and eligibility for renewable energy credits as the government phases out certain benefits under OBBBA. Legal and industry experts have highlighted the implications for developers, emphasizing the need to closely navigate the new construction timing rules to maintain eligibility for these federal clean energy tax credits.