Today, the Treasury Department and the Internal Revenue Service released guidance for the Investment Tax Credit (ITC) under Section 48 of the Internal Revenue Code, an incentive expanded by the Biden-Harris Administration’s Inflation Reduction Act to spur the construction of clean energy infrastructure and create new, good-paying jobs across the nation.
President Biden’s economic platform – Bidenomics – is growing the American economy from the middle out and bottom up. The President’s agenda is lowering energy costs, making historic investments in clean technologies, and bringing good-paying jobs back to the United States – including jobs that don’t require a college degree. Expanded and extended by the Inflation Reduction Act, the revitalized ITC helps meet these commitments in four critical ways:
- First, the proposed rules provide long-sought clarity for power conditioning and transfer equipment for renewable energy technologies – for example, clarifying that project-specific subsea export cables for offshore wind projects are eligible property.
- Second, for the first time, the ITC is available for standalone battery storage as well as battery storage co-located with other electric generation technologies.
- Third, the proposed rules provide guidance for taxpayers on the credit-eligibility of costs for grid interconnection property associated with lower-output energy properties – a transformative change made by the Inflation Reduction Act to help reduce the costs of upgrading the grid to connect small clean energy properties, costs which often prohibit or delay deployment of clean energy projects.
- Finally, the proposed rules update a host of other technical definitions and rules, bolstering certainty and clarity for clean energy developers.
The proposed Section 48 ITC rules will help to lower energy costs for families and businesses, increase the nation’s supply of clean electricity generation and storage, and create new good-paying jobs for lineworkers, electricians, construction crews, factory workers, and many others in a variety of clean energy fields.
The new guidance from the Treasury Department clarifies key credit eligibility requirements—and because the current ITC (alongside the closely-related Production Tax Credit, or PTC) will transition into a tech-neutral approach with the potential to last over a decade, these rules lay the foundation for long-term, transformative investments in clean energy infrastructure and technologies.
Since its enactment last year, the Inflation Reduction Act has already driven more than $130 billion in clean energy investments and created more than 170,000 clean energy jobs. The guidance released today gives clean energy developers the certainty they need to move projects forward and further accelerate the pace of deployment.
To learn more about the ways that Bidenomics is driving historic investments to lower energy costs, create good-paying jobs, and build a clean energy future that works for all of America’s families, visit www.invest.gov.