Regulations for Clean Electricity and Energy Storage Tax Credits Proposed

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The Treasury Department and the Internal Revenue Service (IRS) have released proposed regulations for owners of qualified clean power assets and energy storage technologies under the Inflation Reduction Act. These regulations specify how these owners can apply for applicable tax credits.

New tax credits introduced

The Inflation Reduction Act of 2022 created two main tax credits: the Clean Power Production Credit and the Clean Power Investment Credit. Taxpayers can qualify for these credits if they produce electricity from a qualified clean power facility or make qualified investments in such facilities or energy storage technologies.

The proposed rules provide comprehensive guidance for installations commissioned after 2024. Key areas covered include:

  • Calculation of loan amounts: Details on how to determine the amount of tax credits available.
  • Definition of qualified facilities and technologies: Clear definitions of what constitutes a qualified clean electricity and energy storage technology facility, including required characteristics and integral components.
  • Measuring device: Definitions and requirements for measuring instruments used in these facilities.
  • Affiliated and unaffiliated persons: Clarifications as to who is considered related or unrelated under these rules.
  • General application rules: Rules related to plant extension and other general applications.
  • Recapture rules: Guidelines on how and when tax credits can be reclaimed.
  • Greenhouse gas emissions and rates: Definitions and explanations of greenhouse gas emissions, emission rates and the impacts of carbon capture.
  • Preliminary emission rate: Information on how specific facilities can achieve a certain greenhouse gas emission rate.

The proposed regulations invite public comment to ensure comprehensive feedback and improvements. They also provide details on how the public can submit their comments and information for the public hearing. The Treasury and IRS's proposed regulations are designed to help owners of clean electricity and energy storage technology facilities apply for tax credits. These policies will help ensure the benefits of the Inflation Reduction Act are effectively utilized, promote clean energy, and support investments in sustainable technologies.

Additional resources

For more detailed information, please visit the Inflation Reduction Act 2022 page. Here you will find further explanations and updates on the planned regulations.

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