Understanding the New Clean Electricity tax credits
Eligibility for Technology-Neutral tax credits
The Treasury Department and the IRS have issued proposed guidance on how eligible facilities can qualify for “technology-neutral” clean electricity tax credits under the Inflation Reduction Act. These tax credits replace the existing Production Tax Credit and Investment Tax Credit, making them available for projects placed in service after Dec. 31, 2024.
Incentives for clean energy Facilities
The new tax credits offer incentives to clean energy facilities that achieve net-zero greenhouse gas emissions. This provides a platform for the development of new technologies over time and ensures long-term certainty for investors and developers in clean energy projects.
Identifying Qualifying Technologies
The proposed guidance lists specific technologies that qualify for the Clean Electricity Production Credit and Clean Electricity Investment Credit. These technologies include Wind, Solar, Hydropower, Marine and hydrokinetic, Nuclear fission and fusion, Geothermal, and certain types of waste energy recovery property.
Lifecycle Greenhouse Gas Analysis
clean energy technologies relying on combustion or gasification for electricity production must undergo a lifecycle greenhouse gas analysis to demonstrate net-zero emissions. The proposed rules seek feedback on this analysis for combustion and gasification technologies.
Clarity on Interconnection-Related Property Costs
The guidance clarifies the inclusion of costs related to interconnection for lower-output clean energy facilities eligible for the Clean Electricity Investment Tax Credit. This covers upgrades to local transmission and distribution networks necessary for grid connection.
Expected Impact on Electricity Bills
The proposed tax credits are anticipated to lower the average annual electric bill by $29 to $74 per household in the next six years and $42 to $95 by 2035. This translates to substantial cost savings for U.S. families and a significant increase in clean energy capacity by 2035.
Public Comment and Hearing
Public comments on the proposed guidance will be accepted for 60 days following publication in the Federal Register, with a public hearing scheduled on Aug. 12 and 13.
Read More of this Story at www.cpapracticeadvisor.com – 2024-05-29 19:47:38
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