Inflation Reduction Act

solar panels photovoltaics in solar farm

One of the most celebrated features of the Inflation Reduction Act (“IRA”) is the ability to sell tax credits, including the Production Tax Credit (“PTC”) under Internal Revenue Code (“IRC”) § 45 and the Investment Tax Credit (“ITC”) under IRC § 48. Under federal statute and IRS regulations issued last year, the sale of these tax credits does not result in taxable income to the seller and a buyer does not have to recognize gain on the difference between the value of the tax credit and the buyer’s purchase price. But the answer isn’t so simple under state law, which does not always track the federal rule; in some cases, whether the sale proceeds are taxable is unclear, and buyers and sellers of tax credits need to ensure that they are accurately assessing risk and expense.

Proposed changes to Inflation Reduction Act tax credits, solar tariffs, restrictions on wind energy, orders promoting fossil fuels, and a push for energy-related deregulation are just a few of the executive and legislative actions impacting renewable energy that have arisen at the federal, state, and local levels since President Donald Trump took office. We have…

As detailed previously, the Inflation Reduction Act (IRA) offers incentives to renewable energy development that takes place on certain properties that are affected by potential or confirmed contamination. Under the IRA, a 10% adder is available to any investment tax credit (ITC) or production tax credit (PTC) generated by a renewable energy project constructed on a “brownfield site,” and there have been many questions since the IRA’s passage about what constitutes a brownfield site.

The Inflation Reduction Act’s broad tax incentives for certain investments in renewable energy sparked a flood of capital investment, hastening the development of clean energy infrastructure nationwide.  According to an August 16, 2023 White House Press Release, private companies have announced over $110 billion in clean energy manufacturing investment since the enactment of the…

On November 17, 2023, the U.S. Department of the Treasury issued a Notice of Proposed Rulemaking (the “NPRM”) with respect to Proposed Regulations under section 48 of the Internal Revenue Code of 1986 (the “Code”).  The NPRM addresses the Investment Tax Credit (“ITC”) framework, as amended under the Inflation Reduction Act (the “IRA”).  This blog…

Among the benefits afforded the renewable energy sector by the Inflation Reduction Act of 2022, the ability to monetize 11 new or expanded clean energy tax credits via direct transfer was especially interesting to developers because of its potential to eliminate costly, drawn-out tax equity transactions.

Investors were also eager to participate in the newly…

IRS Internal Revenue Service documents and folder.

The Inflation Reduction Act (the “IRA”) provides funding for several tax credit incentives related to significant investments in energy projects.  One of these credits is the section 48C investment tax credit (“48C Credit”), which was originally offered through the American Recovery and Reinvestment Act of 2009.  The IRA includes a $10 billion allocation to the 48C Credit and also broadens the scope of eligible property a company can invest in to be eligible for the credit.  If selected, the 48C Credit provides a credit equal to 30% of the project’s capital investment that is deemed to be “eligible energy property.”

As healthcare systems continue their bid to “first, do no harm,” more attention is being placed on the organizations’ broader impact on their communities, including the environment and air quality.  It is estimated that the global health care industry is responsible for two gigatons of carbon dioxide each year, or 4.4% of worldwide net emissions.  And according to a September 2019 report by Health Care Without Harm, over half of the industry’s emissions (representing an estimated 2.2% of the worldwide net emissions) can be attributed to the health care industry’s use of energy. The energy-intensive nature of the industry correlates with the often 24/7 use of health care facilities and the high-tech, life-saving equipment. 

When President Jimmy Carter installed rooftop solar panels on the White House, public support for adoption of renewable energy was at a then all-time high and many imagined the possibility of rooftop solar on their own homes and in their own communities. Yet, barriers such as the high up-front installation cost of panels, and of…

Thanks to the Inflation Reduction Act (IRA), which went into effect in January, it can pay to be a brownfield – a term used to refer to a property that is affected by potential or confirmed contamination. Specifically, the IRA offers incentives to renewable energy development that takes place on a brownfield site, which is included as an “energy community” under the IRA. On April 4, 2023, the Internal Revenue Service (IRS) and the Department of Treasury published limited guidance (Notice 2023-29, Energy Community Bonus Credit Amounts under the Inflation Reduction Act of 2022) on the bonuses available for production and investment of energy facilities in energy communities. Unfortunately, even with the guidance, the eligibility of certain sites as brownfields remains uncertain.