Treasury, IRS Propose Rules to Boost Clean Energy Investments
The U.S. Department of Treasury and the Internal Revenue Service (IRS) have released guidance on the Investment Tax Credit (ITC) under Section 48 of the Internal Revenue Code, intended to stimulate investment in clean energy projects. The guidance aims to provide the private sector with clarity on incentives provided by the Inflation Reduction Act, and assist companies in securing financing for such projects. It includes clarity for offshore wind and battery storage projects, rules around the eligibility of standalone battery storage for the ITC, rules on interconnection-related costs for lower-output clean energy installations, and updates to a range of other technical definitions and rules.
Investment Tax Credit Guidance Issued by U.S Government Aims to Boost Clean Energy Projects
The U.S. Department of the Treasury and Internal Revenue Service (IRS) today released guidance on the Investment Tax Credit (ITC) as part of the Inflation Reduction Act. This guidance aims to provide clarity to the private sector for investing in clean energy projects, creating jobs, and strengthening the nation’s energy security.
“Treasury is dedicated to providing companies with certainty needed to finance and advance clean energy projects nationwide,” said Deputy Secretary of the Treasury Wally Adeyemo. “This guidance is key to developing a robust clean energy sector and reducing Americans’ utility bills.”
The Notice of Proposed Rulemaking (NPRM) clarifies the eligibility of certain power conditioning equipment and subsea export cables used in offshore wind projects. It also includes guidelines on the eligibility of standalone battery storage for the ITC, supporting the development of reliable, utility-scale, long-duration energy storage.
The NPRM further proposes rules on the inclusion of interconnection-related property costs for smaller clean energy installations, ensuring they can connect to the grid and start producing power efficiently. Lastly, the NPRM proposes updates to technical definitions and rules to aid project developers.
The Treasury and the IRS welcome comments on the NPRM for 60 days as part of the rulemaking process.
For more information on the Treasury Department’s efforts to implement the Inflation Reduction Act, see the following links:
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