Regulations released for section 48E(h) energy credits: How you can apply
The Treasury Department and IRS have released the final regulations and procedural guidance for the Clean Electricity Low-Income Communities Bonus Credit Amount Program under section 48E(h) of the Internal Revenue Code, established by the Inflation Reduction Act.
The program promotes cost-saving clean energy investments in low-income communities, on Indian land, or as part of affordable housing developments and aims to benefit low-income households.
Here’s an overview of the program and important deadlines to know before applications open on January 16, 2025.
New program updates
Under the Inflation Reduction Act, Section 48(e), Low-Income Communities Bonus switches over to Section 48E(h), Clean Electricity Low-Income Communities Bonus in 2025. This new program opens for applications in 2025 and allocates 1.8 gigawatts of annual capacity through 2032. And depending on greenhouse gas emission levels, the program may be extended.
The final regulations and revenue procedure released today provide guidance for applicants seeking an increased credit amount under this competitive program.
Annual capacity limitation
For each program year, the annual capacity limitation available for allocation is divided across the facility categories as described in the table below:
Section 48E(h) facility categories
|
Category 1: Located in a low-income community Sub-reservation: Eligible residential behind-the-meter facilities Sub-reservation: Eligible front-of-the-meter facilities and nonresidential behind-the-meter facilities |
600 megawatts 400 megawatts 200 megawatts |
|
Category 2: Located on Indian land |
200 megawatts |
|
Category 3: Qualified low-income residential building project |
200 megawatts |
|
Category 4: Qualified Low-income economic benefit project |
800 megawatts |
For the 2025 program year, approximately 174,243 kilowatts (DC) are being carried over from previous program years and distributed evenly between the four categories. However, it is still expected that the 2025 allocation will be used quickly.
Important application deadlines
The application period opens on Thursday, January 16, 2025, at 9:00 a.m. ET and closes on August 1, 2025, at 11:59 p.m. ET.
When the applications open, there will be an initial 30-day period for applications to be submitted, ending on February 14, 2025, at 11:59 p.m. ET. Applications submitted after this 30-day period will be considered on a rolling basis, only if capacity is available and all applications submitted during the 30-day period have been reviewed.
How Wipfli can help
Wipfli’s experienced energy incentives team is ready to help you navigate your potential tax credits. With a team that includes CPA tax professionals, architects and engineers, we have the insight to help you maximize qualifying components and file successfully.
Contact us today and get knowledgeable support for any stage of your energy project.
