Commercial, Finance, Sourcing Renewables - April 1, 2024
DOE Allocates $4 Billion for Clean Energy Supply Chain
The U.S. Department of Energy (DOE), the U.S. Department of Treasury and the Internal Revenue Service (IRS) announced $4 billion in tax credits for over 100 projects across 35 states to increase domestic clean energy manufacturing and lower GHG emissions at industrial facilities.
The projects selected for tax credits under the Qualifying Advanced Energy Project Tax Credit (48C) range from small to large businesses and fall under state and local governments. All of them are required to meet prevailing wage and apprenticeship requirements to receive a 30% investment tax credit.
The tax credits are funded by President Biden’s Inflation Reduction Act.Of the $4 billion tax credits, $1.5 billion supports projects in historic energy communities to lower energy costs and support the climate, supply chain and energy security goals of the Biden-Harris Administration’s Investing in America agenda.
“From direct grants to historic tax credits, the President’s Investing in America agenda is making the nation an irresistible place to invest in clean energy manufacturing,” said U.S. Secretary of Energy Jennifer M. Granholm in a statement. “The President’s agenda places direct emphasis on communities that have traditionally powered our nation for generations, helping ensure those communities reap the economic benefits of the clean energy transition and continue to play a leading role in building up the next wave of energy sources.”
The DOE is partnering with the Treasury Department and IRS to implement the 48C program, and the DOE’s Office of Manufacturing & Energy Supply Chains (MESC) manages the program on behalf of the IRS and Treasury.
The 48C Program received significant interest from industry in Round 1. Applicants submitted concept papers — a project proposal — seeking a total of nearly $42 billion in tax credits across all categories of projects, including nearly $11 billion for projects in designated energy communities census tracts. DOE received approximately 250 full applications from projects requesting a total of $13.5 billion in tax credits. There was great variety in the size and scope of projects, with applicants requesting tax credits ranging from under $1 million to over $100 million.
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