With final rules in place, technology-neutral clean electricity credits will grow the economy, create good-paying jobs, and help save American families up to $38 billion on electricity bills through 2030
WASHINGTON – Today, the U.S. Department of the Treasury (Treasury) and the IRS released final rules for the Clean Electricity Investment and Production Tax Credits – also known as the technology-neutral credits – in tax code sections 45Y and 48E.
These credits are central to cutting energy costs for American families and businesses and producing abundant, affordable power to meet growing demand created by major investments in the U.S. economy. According to analysis from the Department of Energy, the tech-neutral credits, along with other Inflation Reduction Act and Bipartisan Infrastructure Law provisions, are expected to save American families up to $38 billion on electricity bills through 2030.
The Clean Electricity Credits encourage innovation by allowing new zero-emissions technologies to develop over time, while also providing durable incentives for companies to make investments in clean energy technologies that are already contributing to the clean energy investment and manufacturing boom. The final rules issued today provide important clarity and certainty around what clean electricity zero-emissions technologies qualify for the credits – including wind, solar, hydropower, marine and hydrokinetic, geothermal, nuclear, and certain waste energy recovery property. Treasury and the IRS anticipate releasing the first Annual Table confirming this list of qualifying technologies imminently. The final rules also provide guidance to clarify how combustion and gasification technologies can qualify in the future – including on how lifecycle analysis assessments compliant with the statute will be conducted.
“The final rules issued today will help ensure America’s clean energy investment boom continues – driving down utility costs for American families and small businesses, creating good-paying construction jobs, and strengthening energy security by making the U.S. more resistant to price shocks,” said U.S. Secretary of the Treasury Janet L. Yellen.
“America’s clean energy boom is no coincidence, it’s President Biden’s industrial strategy in action: utilizing a range of incentives to accelerate innovative carbon cutting technologies and make the nation more energy resilient,” said U.S. Secretary of Energy Jennifer M. Granholm. “Today’s final guidance helps provide clean energy producers the clarity needed to deploy more clean energy solutions at scale to drive down costs for more American families and deliver future-facing careers for America’s workforce.”
The existing Production Tax Credit and Investment Tax Credit will be available to projects that began construction before 2025. Qualifying projects placed in service after December 31, 2024 will be eligible for the new Clean Electricity Credits.
The final rules released today reflect careful consideration of stakeholder comments and largely maintain the rules as proposed. The final rules also confirm that future changes to the list of zero-emissions technologies or the designation of a lifecycle analysis model that may be used to determine emissions rates will need to be accompanied by an analysis prepared by the U.S. Department of Energy’s National Labs, in consultation with interagency and other experts.
The National Labs are already analyzing the lifecycle emissions of electricity production using certain biomass technologies, based on the requirements in the final rules. Treasury expects this analysis, when complete, will provide additional clarity for taxpayers.
To receive the full value of the credits, taxpayers must meet standards for paying prevailing wages and employing registered apprentices, helping ensure more clean energy jobs are good-paying jobs, and growing career opportunities for workers in the clean energy sector. The technology-neutral Clean Electricity Production and Investment Tax Credits are also eligible for bonus credits related to siting projects in energy communities and meeting certain standards for using domestic content, further supporting robust and geographically diverse job creation and economic opportunity in the growing clean energy sector.
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