The Qualifying Advanced Energy Project Credit (48C) Program
By Barry Devine
Round 2 for the 48C has been announced!!
“The DOE section 48C portal will open no later than May 28, 2024, for taxpayers to submit a concept paper and begin the process of seeking a section 48C credit allocation.”
It will remain open for 30 days, which means that the final deadline for concept paper submissions is June 27th.
The 48C program:
The Qualifying Advanced Energy Project Credit (48C) program was initially established by the American Recovery and Reinvestment Act of 2009. The Inflation Reduction Act of 2022 expanded the program with a $10 billion investment.
The Tax Credit is a percentage of investment cost and is a 6% base credit or up to 30% when prevailing wage and apprenticeship requirements are met. A mandatory aspect of the program is that 40% of the recipients must be in a Designated Energy Community. (See link below.)
How to Qualify:
The program outlines three distinct qualification categories. If you plan to expand or re-equip an industrial or manufacturing facility in one of these three categories, you should apply.
- Clean Energy Manufacturing and Recycling
- Industrial Decarbonization
- Critical Materials (Refining, Processing, and Recycling)
The Application Process:
The 48C Program is a competitive application process in which the DOE reviews concept papers and provides recommendations to the IRS for awarding. For each project that a Taxpayer pursues, it must complete a two-stage technical evaluation process:
- Stage 1: Concept Paper for DOE Consideration
- Stage 2: A §48C(e) application
DOE will evaluate concept paper submissions using the category-specific technical review criteria, including whether the project addresses specific energy supply chain and manufacturing priority areas, as well as overarching program policy factors.
Eligible applications will be evaluated by DOE against technical review criteria reflecting four major priorities:
- Criterion 1: Commercial Viability
- Criterion 2: Greenhouse Gas Emissions Impacts
- Criterion 3: Strengthening U.S. Supply Chains and Domestic Manufacturing for a Net-Zero Economy
- Criterion 4: Workforce and Community Engagement
A Winning Concept:
As stated above, your concept is critical to the process; however, just utilizing the criteria above may not be adequate to receive consideration. There is more to the evaluation process. What’s missing?
Your Story! Show the ‘why’ behind your project. Show that you understand both the technology and energy components of your project, including outputs, performance, portfolio diversity, etc. Moreover, show that you are making a positive impact in the community. This is critical to be awarded but remember; Less is More!
It’s time to get your concept paper ready.
Contact us today to help you navigate this process.