The U.S. Department of Energy (DOE), the U.S. Department of Treasury, and the Internal Revenue Service (IRS) have revealed a $4 billion tax credit program for over 100 projects in 35 states. This is aimed at speeding up domestic clean energy production and cutting greenhouse gas emissions in industrial facilities. The initiative called Qualifying Advanced Energy Project Tax Credit (48C), which is funded by President Biden’s Inflation Reduction Act, covers businesses, governments, and communities that fulfill wage and apprenticeship requirements, offering them a 30% investment tax credit. A portion of the $4 billion will support projects in historic energy communities, creating jobs, reducing energy costs, and supporting climate and energy security objectives of the Biden-Harris Administration's Investing in America plan. agenda.
“The President’s Investing in America agenda, from direct grants to historic tax credits, is making the nation an attractive place to invest in clean energy manufacturing.” U.S. Secretary of Energy Jennifer M. Granholm stated that the President's agenda focuses on communities that have been the traditional energy sources for the nation, ensuring they benefit economically from the clean energy transition and continue to lead in developing new energy sources. “DOE is working with Treasury and IRS to execute the initiative called Qualifying Advanced Energy Project Tax Credit (48C) funded by the President’s Inflation Reduction Act. The DOE’s Office of Manufacturing & Energy Supply Chains (MESC) manages the § 48C Program on behalf of IRS and Treasury. This program was expanded with a $10 billion investment under the Inflation Reduction Act of 2022, with at least $4 billion allocated for projects in specified § 48C energy communities—communities with closed coal mines or coal plants as defined in Appendix C of IRS Notice 2023-44..”
The § 48C Program offers an investment tax credit of up to 30% for certified projects meeting wage and apprenticeship requirements. The § 48C Program received significant interest from industry in Round 1, with a variety of project sizes and proposals, totaling nearly $42 billion in tax credits sought across all project categories, including almost $11 billion for projects in specified energy communities census tracts. The program received around 250 full applications, seeking a total of $13.5 billion in tax credits, with project sizes ranging from under $1 million to over $100 million. Details on the § 48C(e) Round 1 allocations and applicationsclean energy production and recycling About $2.7 billion in tax credits, which is about 67% of the tax credits for the first round.Chosen from applications seeking support for developing crucial manufacturing capabilities for clean energy, including clean hydrogen, grid infrastructure, electric vehicles, nuclear power, solar PV, and wind energy, among others.
Handling the recycling, processing, and refining of critical materials.
An amount of $800 million in tax credits, which accounts for about 20% of the tax credits for the first round.
Selected projects are investing in various electrical steel applications, lithium-ion battery recycling, and rare earth projects, which are all important for maintaining a reliable energy system and advancing the clean energy transition.Reducing carbon emissions in industrial processes.
- About $500 million in tax credits, which is approximately 13% of the tax credits for the first round.
Picked projects would implement decarbonization measures across diverse sectors, including chemicals, food and beverage, pulp and paper, biofuels, glass, ceramics, iron and steel, automotive manufacturing, and building materials, with low-carbon fuels, feedstocks, and energy sources being well-represented as solutions for decarbonization.The §48C program will help drive the nation’s fair transition to a clean, secure, affordable, and resilient energy system, reduce industrial greenhouse gas emissions, and create high-quality jobs across the country.
- To be eligible for the tax credit, selected projects must submit information to the 48C portal within two years to certify the project, and within an additional two years following project certification, the project must be put into operation.
As mandated by law, the §48C(e) program will disclose the names of all organizations with certified projects and the amount of that allocation after projects are certified. Before certification, the program cannot provide identifying information about allocation recipients or their projects without the applicant’s consent. Allocation recipients are not obligated to publicly share information about their allocation at this time, but some may do so voluntarily. Those interested may contact DOE about potentially participating in upcoming announcements, which will not impact the recipient’s allocation in any way.The U.S. Department of Treasury and Internal Revenue Service will release a notice for the second round of the §48C program in the coming months, with the concept paper submission window expected this summer.
- The U.S. Department of Energy (DOE), the U.S. Department of Treasury, and the Internal Revenue Service (IRS) have announced $4 billion in tax credits for over 100 projects across 35 states…
The §48C program will help to catalyze the nation’s equitable transition to a clean, secure, affordable, and resilient energy system, reduce industrial greenhouse gas emissions, and create high-quality jobs across the country.
For selected projects to receive the tax credit, information will need to be submitted to the 48C portal within two years to certify the project. Within an additional two years following project certification, the project must be placed in service.
As required by statute, the §48C(e) program will publish the names of all organizations with certified projects and the amount of that allocation after projects are certified. Prior to certification, law prohibits the §48C(e) program from providing identifying information about allocation recipients or their projects without the applicant’s consent. Allocation recipients are not required to publicly share information about their allocation at this time, but some may choose to do so voluntarily. Allocation recipients who are interested in doing so may contact DOE about the potential to voluntarily participate in upcoming DOE announcements. Participation in upcoming announcements will not affect the recipient’s allocation in any way.
The U.S. Department of Treasury and Internal Revenue Service will issue a notice for the second round of the §48C program in the coming months, with the concept paper submission window anticipated this summer.
