SECTION 6. FIVE PERCENT SAFE

HARBOR FOR LOW OUTPUT SOLAR FACILITIES

.01 In general . In the case of a low output solar facility (as defined in section 6.02 of this notice), a taxpayer may establish that construction has begun before July 5, 2026, by satisfying either the Physical Work Test described in section 3.02 of this notice, or by applying principles similar to those provided in section 5 of Notice 2013-29 regarding the Five Percent Safe Harbor (as described in section 2.02(2)(ii) of Notice 2022-61).

.02 Low output solar facility. (1) Definition . A low output solar facility is an applicable solar facility that has maximum net output of not greater than 1.5 megawatt (MW) (as measured in alternating current) (1.5-Megawatt Maximum). For purposes of the 1.5-Megawatt Maximum, output is measured at the level of the qualified facility.

(2) Property included in an applica- ble solar facility . An applicable solar facility includes a unit of a qualified solar facility, which, in turn, includes all functionally interdependent components of property owned by the taxpayer that are operated together and that can operate apart from other property to produce electricity. Components of property are functionally interdependent if the placing in service of each of the components is dependent upon the placing in service of each of the other components to produce electricity. A qualified solar facility also includes property owned by the

taxpayer that is an integral part of the qualified solar facility. A component of property owned by the taxpayer is an integral part of the qualified facility if it is used directly in the intended function of the facility and is essential to the completeness of such function. See §§ 1.45Y-2(b)(3) and 1.48E-2(d)(3) for additional descriptions of property integral to a qualified facility.

.03 Measurement of output . (1) In general . The maximum net output of an applicable solar facility is measured only by nameplate generating capacity (in alternating current) of the unit of qualified facility (as described in §§ 1.45Y-2(b)(2) and 1.48E-2(d)(2)), which does not include the nameplate capacity of any component that is an integral part (as described in §§ 1.45Y2(b)(3) and 1.48E-2(d)(3)) of the applicable solar facility, at the time the applicable solar facility is placed in service. The nameplate generating capacity of the applicable solar facility is measured independently from any other applicable solar facility that shares an integral part with the applicable solar facility. Notwithstanding this rule, the nameplate generating capacity of two or more applicable solar facilities having integrated operations are measured in the aggregate for purposes of the 1.5-Megawatt Maximum.

(2) Nameplate capacity. For purposes of section 6.02(1) of this notice, the determination of whether a qualified facility has a maximum net output of not greater than 1.5 MW (as measured in alternating current) is based on the nameplate capacity. The nameplate capacity for purposes of the 1.5-Megawatt Maximum is the maximum electrical generating output in megawatts that the unit of qualified facility is capable of producing on a steady state basis and during continuous operation under standard conditions, as measured by the manufacturer and consistent with the definition of nameplate capacity provided in 40 CFR 96.202. If applicable, taxpayers should use the International Standard Organization (ISO) conditions to measure the maximum electrical generating output of a unit of qualified facility. For applicable solar facilities that generate electricity

Bulletin No. 2025–36 355 September 2, 2025

YIELD CURVE AND SEGMENT RATES

Section 430 specifies the minimum funding requirements that apply to single-employer plans (except for CSEC plans under § 414(y)) pursuant to § 412. Section 430(h)(2) specifies the interest rates that must be used to determine a plan’s target normal cost and funding target. Under this provision, present value is generally determined using three 24-month average interest rates (“segment rates”), each of which applies to cash flows during specified periods. To the extent provided under § 430(h) (2)(C)(iv), these segment rates are adjusted by the applicable percentage of the 25-year average segment rates for the period ending September 30 of the year preceding the calendar year in which the plan year begins. ¹ However, an election may be made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates.

Section 1.430(h)(2)-1(d) provides rules for determining the monthly corporate bond yield curve, ² and § 1.430(h) (2)-1(c) provides rules for determining the 24-month average corporate bond segment rates used to compute the target normal cost and the funding target. Consistent with the methodology specified in § 1.430(h)(2)-1(d), the monthly corporate bond yield curve derived from July 2025 data is in Table 2025-7 at the end of this notice. The spot first, second, and third segment rates for the month of July 2025 are, respectively, 4.38, 5.41, and 6.13.

The 24-month average segment rates determined under § 430(h)(2)(C)(i) through (iii) must be adjusted pursuant to § 430(h)(2)(C)(iv) to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates. Those percentages are 95% and 105% for plan years beginning in 2024 and 2025. For this purpose, any 25-year average segment rate that is less than 5% is deemed to be 5%. The 25-year

in direct current, a taxpayer determines whether an applicable solar facility has a maximum net output of not greater than 1.5 MW (in alternating current) by using the lesser of:

(a) The sum of the nameplate generating capacities within the applicable solar facility in direct current, which is deemed the nameplate generating capacity of the unit of applicable solar facility in alternating current; or

(b) The nameplate capacity of the first component of the applicable solar facility that inverts the direct current electricity into alternating current.

(3) Integrated operations . For the purposes of the 1.5-Megawatt Maximum, an applicable solar facility is treated as having integrated operations with one or more other applicable solar facilities of the same technology type if the facilities are:

(a) Owned by the same or related taxpayers;

(b) Placed in service in the same taxable year; and

(c) Transmit electricity generated by the facilities through the same point of interconnection or, if the facilities are not grid-connected or are delivering electricity directly to an end user behind a utility meter, are able to support the same end user.

(4) Related taxpayers . For purposes of section 6.03(3) of this notice, the term “related taxpayers” means members of a group of trades or businesses that are under common control (as defined in § 1.52-1(b)). Related taxpayers are treated as one taxpayer in determining whether an applicable facility has integrated operations.