Brian Grenko, President of VDE Americas on how the July 4 tax credit deadline is shaping the US solar market
Let’s start with your career history and its evolution to your current role.
After starting my renewable energy career at the pioneering solar panel manufacturer AstroPower, which was later acquired by GE, I moved to San Francisco to start up a regional sales office and oversee technical support for Yingli Green Energy (Yingli). As Yingli became the world’s largest solar panel manufacturer, I oversaw the development of an industry-leading research and development lab whose work later became the basis of a successful start-up called Amplify Energy, which focused on the evaluation and improvement of operating solar power generation facilities, before its acquisition by another firm. I then joined VDE Americas in 2016 with the goal of creating an industry leading technical advisory firm advancing the deployment of large-scale solar and energy storage projects that are financeable and insurable.
What first attracted you to this industry?
I’ve always had a deep appreciation for the outdoors and the natural world around us. In the words of Robert Baden-Powell, founder of the modern scouting movement, we’re all encouraged to ‘try and leave this world a little better than we found it’. Being able to apply my engineering background to the critical challenge of global climate change was an opportunity I could never pass up.
A pivotal moment in my career occurred in 2002, shortly after I joined the solar industry, when California established its Renewables Portfolio Standard to require a significant portion of the state’s electricity generation to be served by renewable resources, bolstering market demand. I’m extremely proud to have played a significant role in driving down the cost of solar energy through technology breakthroughs and economies of scale, working with my industry colleagues to make solar the most affordable and accessible form of energy on the planet. Current advancements in energy storage are further unleashing the benefits of renewables.
Tell us about the technical guide VDE Americas has recently produced to support solar developers ahead of the July 4 ITC deadline.
Our recently released technical memorandum empowers solar energy project stakeholders to take decisive actions to maximize the deployment of projects that can qualify for expiring tax credits. The memo compiles actionable recommendations that developers can use to right-size capital expenditures before project financing closes while reducing exposure to regulatory risks. The memo pertains to all commercial market sectors, provides guidance for utility and community solar projects, and covers both the investment tax credit (ITC) and production tax credit (PTC).
Many project developers will be able to demonstrate compliance with ‘beginning of construction’ requirements through the procurement of project-specific equipment (aka ‘safe harbor’), now contemplated as ‘off-site physical work of a significant nature’. We recommend developers adopt enhanced documentation standards to reduce interpretive risk and note that not all types of equipment qualify. Thorough documentation including inspector reports and date-stamped photos with GPS coordinates is critical to meet the heightened Physical Work Test and prove completion of qualifying activities.
Where are you seeing the most confusion or misinterpretation among project owners and developers, and what are the consequences of this?
The Treasury’s updated guidance is vague and is subject to interpretation, creating some confusion within the solar industry regarding beginning of construction requirements, particularly in regard to what constitutes physical work of a significant nature. However, successfully establishing compliance with these requirements simply represents an initial step in maintaining tax credit eligibility. Projects must also demonstrate ongoing construction progress to retain qualification throughout the development and construction period. Projects that fail to establish beginning of construction after July 4 face a challenging and potentially insurmountable 18-month placed-in-service deadline for tax credit eligibility.
Can you clarify how the Physical Work Test and Five Percent Safe Harbor differ, and which types of projects each applies to?
The Physical Work Test is the primary method for establishing ‘beginning construction’ for solar projects over 1.5 MW AC. Project stakeholders can use both offsite work, which includes buying project-specific equipment, and/or onsite work, which includes things like establishing service access roads, drilling piles, and laying foundations for equipment pads, to satisfy the Physical Work Test.
The Five Percent Safe Harbor remains a method of establishing start of construction for tax credit eligibility specifically for solar projects with maximum net power output of 1.5 MW AC or less.
How do you think developers can balance urgency to meet deadlines with quality workmanship?
Based on our interpretation of the guidance and review of legal briefings from multiple law firms, work representing just two-to-five-percent of total project fair market value or capital cost can qualify if it meets the ‘significant nature’ criteria – but this is a general range and not a bright-line test. For those project developers unable to procure equipment in time, with conscientious planning, project developers and EPC contractors can still organize parallel on-site physical work activities to occur in an expedited manner while satisfying the Physical Work Test, as further discussed in our memo.
Large-scale utility projects unable to satisfy beginning of construction requirements by July 4, 2026 must be placed in service by December 31, 2027. To ensure these projects are constructed in conformance to project requirements and with good quality workmanship, we recommend owners carefully select EPC contractors with a proven track record and consider hiring a third-party technical advisor such as VDE to monitor construction.
As VDE Americas sits at the intersection of technical advisory and risk mitigation, where are you seeing the most stress right now?
Equipment manufacturers have taken various steps in recent years to reduce the cost of their products: PV module glass is thinner and frames have less aluminum; tracker manufacturers are using shorter rails; and copper is replacing silver in some places while aluminum is replacing copper in others. Although these ‘improvements’ have contributed to reduced system cost, in some cases they have come at the expense of serial defects, premature failures, and underperformance, implying that the value engineering pendulum has swung too far. In other words, equipment manufacturers have sub-optimized their products to the detriment of system performance.
Fortunately, we’ve also observed trends by some companies to consider a more holistic approach to PV system design that is more resilient. Back in 2020, virtually all single-axis solar trackers were designed to stow flat during wind events, minimizing steel embedment. However, after a series of high-profile utility-scale solar projects were destroyed by severe hail events, we worked with several tracker companies to help them evolve their products to be both wind and hail-resilient while also minimizing material costs.
What do you see as the greatest barriers to wider solar adoption, and how can we overcome these issues?
There is a popular saying often attributed to labor activist Nicholas Klein: ‘first they ignore you, then they laugh at you, then they fight you, and then you win’. This might just be the story of solar energy. Within a generation, we’ve come from being largely ignored to becoming the cheapest form of electricity commercially available. The dynamic regulatory environment created by the current administration beholden to oil and gas interests, and the associated futile political fight against renewable energy, will only serve to proliferate further innovation to satisfy our nation’s appetite for affordable energy.
As sunshine is an intermittent resource, the most significant factor influencing the widespread adoption of solar energy is the advancement of battery technologies to store and deliver solar energy as needed. Growing demand for energy will continue to drive down battery costs, which will enable solar to be deployed in even more locations.
The rapid expansion of US solar development is also increasingly constrained by a shortage of skilled construction labor. To overcome this, the sector can scale apprenticeship programs, expand partnerships with trade schools, standardize national solar training credentials, and increase incentives for skilled electrical technicians, particularly those trained in medium-voltage and DC systems, which face the most acute shortages.
What is your perspective on the solar market over the next 12 to 24 months, and what does the market look like for projects that miss the July 4 deadline?
Despite regulatory hurdles, I believe that the solar industry will continue to grow. As energy demand increases, other energy sources like nuclear and natural gas lack the technology and domestic manufacturing infrastructure to meet the growing energy needs spurred by AI, data centers, and electrification. Solar energy is best suited to quickly meet rising energy demand.
Projects that begin construction after July 4, 2026, face extraordinary execution pressure due to the compressed timeline mandated by the One Big Beautiful Bill Act (OBBBA). These projects must be placed in service by December 31, 2027, providing limited time to progress from the start of construction to commercial operation. Given current transformer and major equipment supply chain constraints, navigating an 18-month construction timeline may be infeasible for utility-scale projects, which are typically constructed over a 24-to-36-month period.
If you could implement one change that would accelerate the energy transition, what would it be, and why?
If I could implement just one change, it would be to introduce a nationwide fast‑track policy for modernizing and expanding the electric grid. No matter how quickly we build renewable generation, storage, or EV charging, the biggest bottleneck in the energy transition is the lack of transmission capacity and the slow, inconsistent permitting that prevents clean energy from reaching demand centers. We know that solar energy is already cost-competitive, but a modernized, more interconnected grid unlocks every other part of the transition, including transmission and distribution, storage, electrification, and resilience.
Is there anything else you would like to add that we haven’t covered?
As the solar tax credits discussed above phase out and demand for clean energy continues to accelerate, the market for buying and selling operational solar facilities is entering a period of rapid growth – something already evident in current transaction activity. Rapid yet accurate valuation of operating assets will be essential for investors seeking to compete effectively, and our team is well positioned to guide and advise project owners through this evolving landscape.