What Credits are Available?
§48 (ITC)
Investment Tax Credit
§48E
Renewable Energy & Storage Projects
§45X
Advanced Manufacturing Production Credit
Talk to a Renewable Energy Tax Credit Specialist Today!
OR
IRC §48
INVESTMENT TAX CREDIT
The Inflation Reduction Act of 2022 brought the most significant and transformative renewable energy incentive opportunities to help US businesses manage and substantially reduce their energy costs and improve their energy security. Taking the next step toward enhancing our renewable energy infrastructure, it builds on gains from the American Recovery and Reinvestment Act of 2009. Not just limited to big energy, utility companies, and tax equity investors, the benefits of clean energy are available to any business that consumes electricity in its day-to-day operations.
- Wind
- Solar
- Geothermal
- Energy Storage
- Waste Energy Recovery
- Biogas
- Microturbines
- Fuel Cells
- Qualified hydropower
- Marine & hydrokinetic
- Combined Heat and Power (CHP) or Cogeneration – phase out 2025
- Microgrid Controllers – phase out 2025
- Electrochromic Glass – phase out 2025
- Credits for certain “Energy Projects” can be increased 5x by meeting prevailing wage and apprenticeship rules.
- The Energy Credit can be treated as a tax payment if the taxpayer is a Not-for-Profit entity per §6417
- Credit rates range from 6% – 30% depending on the type, construction start date, and placed-in-service date
- The Energy Credit is a “Specified credit” which can offset AMT per §38(c)(4)(B)(x)
- Property must conform to performance and quality standards
- Requires a §50(c)(3) basis reduction of 50% of the ITC
- The Energy Credit can be transferred per §6418
- Property must be depreciable
OR
IRC §45X
IF YOU ARE…
- Manufacturing certain renewable energy or energy storage products, parts, or components in the US
- Producing critical minerals in the US, including aluminum, beryllium, chromium, cobalt, lithium, and others
- Selling to an unrelated person as a part of your company’s trade or business
YOU MAY QUALIFY FOR A PRODUCTION TAX CREDIT FOR UP TO 10 YEARS THROUGH 2032
Eligible Components
- Photovoltaic cells
- Photovoltaic wafers
- Polymeric back sheets
- Solar grade polysilicon
- Solar modules
- Solar trackers and components, including torque tubes and structural fasteners
- Blades
- Nacelles
- Towers
- Offshore wind foundations
- Related offshore wind vessels
- Central inverters with a capacity greater than 1 MW
- Commercial inverters suitable for commercial or utility-scale applications
- Distributed wind inverters with a capacity of up to 150 kilowatts
- Microinverters with a rated output of 120/240-volt single phase or 208/480 three-phase power
- Residential inverters with a rated output of 120/240-volt single-phase power
- Utility inverters with a rated output of not less than 600 volt three-phase power
- Electrodes
- Battery cells
- Battery modules
- Minerals that are critical components in the manufacture of certain renewable energy products
- Aluminum, beryllium, chromium, cobalt, graphite, lithium, nickel, tungsten and others
OR
IRC §48E
Effective January 1, 2025 businesses can claim a 30% investment tax credit for installing certain clean electricity facilities or energy storage technologies to reduce energy costs and more efficiently manage energy usage
- Tangible personal property
- Integral to the qualified facility
- Depreciable, and either
- Taxpayer constructed or
- Acquired by the taxpayer, and the original use begins with the taxpayer
TYPES OF QUALIFIED FACILITIES:
- Wind
- Hydropower
- Hydrokinetic
- Nuclear fission
- Waste energy recovery property
- Up to 5MW capacity interconnect property
- Solar
- Geothermal
- Fusion energy
A unit of energy storage technology that is either:
- A functionally interdependent component of property operates together or can operate apart
- From another property to perform the intended energy storage function, or
- An integral part of an EST
TYPES OF EST:
- Electrical energy storage property
- Thermal energy storage property
- Hydrogen energy storage property
Applicable 10% Bonus Adders
ENERGY COMMUNITY
An area either employing people in fossil fuel industries with an unemployment rate exceeding national averages, or where a coal mine or coal-fired electric-generating unit has been retired.
LOW-INCOME COMMUNITIES
A census tract property with a poverty rate of 20%, or if rural, the median family income doesn’t exceed 80% of the statewide median income, or is on Indian land.
DOMESTIC CONTENT
A project using 100% domestic structural steel and at least 45% of domestic manufactured
IRC 48E AND FINAL TREASURY REGULATION 1.48E-2
Excludes transmission distribution lines, access roads other than necessary onsite roads, fencing, and buildings unless that which is an essential item of machinery or equipment that would be replaced if the components of property it houses are replaced. 1.48E-2(d).
Ready to find out if you qualify?
Download Tri-Merit's Renewable Energy Tax Credit Guide
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