The U.S. Department of the Treasury’s Internal Revenue Service released guidance for the Internal Revenue Code §48C—The Qualifying Advanced Energy Project Credit (the Credit). The additional information and administrations of the Credit provides $10 billion in credits for qualified advanced energy projects. This is meant to spur investment in clean-energy manufacturing and materials processing to allow for existing energy infrastructure to be retooled for the clean energy economy.
According to Wiley Law, a broad variety of projects are eligible to apply for a §48C investment tax credit of up to 30%. Qualifying advanced energy projects include (1) clean energy manufacturing and recycling projects, (2) greenhouse gas (GHG) emission reduction projects, and (3) critical mineral (e.g., aluminum) projects. Eligible clean energy manufacturing and recycling projects and critical mineral projects may re-equip or expand existing facilities or establish new facilities. Eligible GHG emission reduction projects will re-equip existing facilities with equipment designed to reduce emissions by at least 20%. The notice provides updated examples of eligible projects within each of these three categories.