DOE, Treasury, and IRS team up to support clean energy investments in U.S.

Feb. 21, 2023
The three agencies will work together on two projects which will be funded by the Inflation Reduction Act.

The U.S. Department of Energy (DOE), the U.S. Department of the Treasury, and the Internal Revenue Service (IRS) are offering programs designed to increase clean energy manufacturing in America. The three agencies will work together on two projects which will be funded by the Inflation Reduction Act.

The Low-Income Communities Bonus Credit Program (48(e)) is designed to promote clean energy efforts and investments in low-income communities. This includes Tribal Lands and affordable housing communities. According to the U.S. Treasury Department, this program offers “a boost of up to 20 percentage points to the investment tax credit for solar and wind energy projects in low-income communities. The notice outlines the program goals, including increasing clean energy facilities in low-income communities, encouraging new market participants, and benefitting individuals and communities that have experienced adverse environmental impacts or lacked economic opportunities.”

The Qualifying Advanced Energy Project Credit (48C) will offer $4 billion in tax credits to eligible projects that reduce greenhouse gas emissions at industrial plants or projects that increase supply chains for clean energy components within the United States. According to the IRS, “approximately $1.6 billion of these credits to be allocated to projects located in certain energy communities. The Treasury Department and the IRS will allocate the remaining credits in future allocation rounds.”

The DOE also announced the Advanced Energy Manufacturing and Recycling Grant Program, which will offer $350 million to small- and medium-sized manufacturers who create or recycle items used in the creation of clean energy. Only companies in specific communities will be eligible to apply for funding. According to the DOE, its Office of Manufacturing and Energy Supply Chains will manage the program and help “manufacturers in feasibility analyses and other planning activities in support of the transition of dislocated workers into clean energy jobs and of inactive energy infrastructure into hubs for future economic growth.”