48C: Advanced Energy Project Credit
Federal Agency
Sub-Department
Internal Revenue Service (IRS)
Purpose
To provide a tax credit for investments in advanced energy projects that fall under three sub-types: (1) Clean Energy Manufacturing and Recycling Projects, (2) Greenhouse Gas Emission Reduction Projects, and (3) Critical Material Projects, each with their own guidance and definitions.
Applicant and/or Project Eligibility Requirements
Available a project that (1) re-equips, expands, or establishes an industrial or manufacturing facility for the production or recycling of a range of clean energy equipment and vehicles; (2) re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent; or (3) re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials.
Decarbonization Considerations
To qualify as an eligible greenhouse gas emissions reduction project, an entity must install technology in an industrial or manufacturing facility to reduce greenhouse gas emissions by at least 20%.
Equity Considerations
See the "Equity Design Considerations for Federal Funding" for general considerations and additional sector-based resources: https://cityrenewables.org/resources/equity-design-considerations-for-federal-funding/
Helpful Tips
Tax-exempt entities can leverage these credits through a new mechanism known as "elective" or "direct" pay. To learn more about how these tax credits work for entities with and without tax liability, check out our Funding Guidance here: https://cityrenewables.org/funding-guidance/understanding-available-incentives/tax-credits-for-renewable-energy/
Other Notes
48C had been enacted in 2009 but was fully allocated after the 2nd allocation round in 2013. The Inflation Reduction Act provides $10 billion of allocations, directs a minimum share to energy communities, and expands eligibility to new types of projects. See common themes in issues in concept paper feedback here: https://www.irs.gov/pub/newsroom/48c-round-1-concept-paper-themes-and-issues.pdf