Solar and Storage - Inflation Reduction Act Funding

The Inflation Reduction Act (IRA) has expanded funding sources for investments in manufacturing, installation, and production of clean energy technologies, such as solar and energy storage. This includes new tax provisions for clean energy projects and the expansion of existing grant and loan programs to help fill funding gaps for local governments and other tax-exempt entities.

The resources below outline the overarching changes introduced by the IRA, including expanded funding opportunities and elective pay, which allows tax-exempt entities to receive payment for the full value of clean energy tax credits.

• Inflation Reduction Act Guide for Solar and Storage Projects [PDF]: Detailed information on new and expanded funding opportunities (e.g., elective pay, tax credits, grants, and loans) available to local government and tax-exempt entities.
• Summary Document - Inflation Reduction Act Guide for Solar and Storage Projects [PDF]: A summary of the information on new and expanded funding opportunities available to local government and tax-exempt entities.
• Solar Tax Credit Assessment Tool [XLSX]: This tool is designed help local governments and other tax-exempt entities choose between the IRA’s Investment Tax Credit and the Production Tax Credit for eligible projects.

Supplementary Guidance for Solar and Storage Projects Under the IRA

The following table contains a list of supplementary guidance released by the IRS with respect to the Inflation Reduction Act. Any additional guidance from the IRS will be added as it’s released.

*Updated December 16, 2024
Other federal elective pay resources can be found below.

IRS Release	Release Date	Summary
Final Rules on Investment Tax Credit	December 4, 2024	The Treasury Department and Internal Revenue Service released final rules for the Investment Tax Credit which clarify general rules and eligible property for the credit including updates to eligible equipment for offshore wind, geothermal heat pumps, and biogas. Other notable changes include clarification that co-located energy storage can claim a production tax credit even if the co-located generation technology is receiving an investment tax credit, hydrogen storage does not need to store hydrogen solely for energy use, and the definition of an energy project has been clarified.
Notice 2024-84	November 22, 2024	The Internal Revenue Service and Treasury Department released a notice that extended the period of submitting an attestation to claim either an increased cost exception or a non-availability exception, or both for an exemption from the domestic content elective payment phaseout schedule. As long as construction begins before the later of January 1, 2027 or the issuance of further IRS guidance, the attestation submitted will be sufficient to be granted an exemption from the phaseout schedule.
IR-2024-292	November 19, 2024	The Internal Revenue Service and the Department of the Treasury released final regulations providing guidance on co-owners of clean energy projects can receive tax credits through elective pay, including co-ownership between a tax-exempt entity and a private developer or between multiple tax-exempt entities. Additionally, proposed regulations were released providing additional administrative requirements for entities part of an unincorporated organization for the purposes of being eligible for elective pay credits.
IR-2024-267	October 11, 2024	The Internal Revenue Service announced an extension of time for certain applicable entities to make an elective payment election on Form 990-T. Entities that did not file a timely extension on Form 8868, will be granted an automatic six-month extension to file a Form 990-T for purposes of making an elective payment election from the original return due date. The relief provided applies to applicable entities making an election for a taxable year ending between December 31, 2023 through November 30, 2024. Applicable entities include those that had a filing obligation under 6011 or 6033(a), did not otherwise receive an extension to file the return, and meets all filing requirements.
2024 Program Year of Inflation Reduction Act Program for Solar and Wind Energy in Low-Income Communities	September 24, 2024	The Treasury Department announced applications for the 2024 program year of the Low-Income Communities Bonus Credit Program was accepting applications to projects eligible for Categories 1, 3 and 4 on a rolling basis until October 10, 2024. Applications for projects eligible for Category 2 were being accepted on a rolling basis until November 12, 2024.
Notice of Proposed Rulemaking for Clean Electricity Low-Income Communities Bonus Credit Program	August 30, 2024	The Treasury Department and the Internal Revenue Service issued a Notice of Proposed Rulemaking for the Clean Electricity Low-Income Communities Bonus Program. The announcement expands the eligible technologies for this bonus credit to include non-combustion and gasification facilities that have a greenhouse gas emission rate of zero or less including hydropower, geothermal, nuclear, and waste-to-energy. The rulemaking announcement also included announcing a 1.8 GW Capacity limitation for allocation under the program beginning in 2025. Written comments must be received within 30 days after publication in the Federal Register, and a public hearing is scheduled for October 17, 2024 at 10 am Eastern.
IR-2024-228	August 29, 2024	Full applications have opened for Round 2 of the Qualifying Advanced Energy Project Tax Credit program. Applicants who submitted a concept paper are now able to submit a full application, regardless of whether they received an encourage or discourage letter. Applications will be due Friday October 18 at 11:59 pm Eastern time. A webinar will be hosted for applicants on Monday September 16 at 1 pm Eastern, and applicants can register for the webinar here . Additional updates and applicant templates can be found on the Department of Energy site .
IR-2024-210	August 14, 2024	The IRS is strongly recommending qualifying entities that placed projects in service in 2023 to complete their pre-filing registration if they plan to claim elective pay. The IRS also announced upcoming office hours to discuss the pre-filing registration process and the IRA/CHIPS Pre-filing Registration Tool. All session are between 1-2:30pm ET. Registration is available for the following dates: August 14 , September 4 , September 18 , and October 2 .
IR-2024-168	June 18, 2024	Final regulations were released on the prevailing wages and apprenticeship requirements for clean energy incentives through the Inflation Reduction Act. Additional fact sheets surrounding these regulations have also been released including the requirement fact sheet and the prevailing wage and apprenticeship overview . The prevailing wage and apprenticeship frequently asked questions have also been updated. Most notably, there are updates to the penalty structure for failing to meet the requirements, and recommendations on taking proactive steps to ensure proper compliance.
IR-2024-157	June 7, 2024	Notice 2024-48 was released which provides updated guidance for the Energy Community Bonus Credit requirements. Appendix 1 and 2 of the notice provide lists of eligible communities under the Statistical Area Category and the Coal Closure Category respectively. The frequently asked questions for energy communities were also updated, and can be found here .
IR-2024-150	May 29, 2024	The Department of the Treasury and the Internal Revenue Service issued proposed regulations to provide guidance for the types of facilities placed in service after 2024 that can qualify for the clean electricity investment credit or the clean electricity production credit. Any comments on the proposed regulations must be provided by August 2, 2024. Public hearings are scheduled on August 12th and August 13th at 10 am ET.
IR-2024-149	May 28, 2024	This announces the opening of the application portal for the Low-Income Communities Bonus Credit Program for solar and wind facilities under 5 megawatts (AC). All applications submitted between now and 11:59 pm ET on June 27th will be treated as if they were submitted at the same time and date. Applications submitted after June 27th will be evaluated on a rolling basis, while capacity allocations still remain.
IR-2024-147	May 24, 2024	A corrected version of the domestic content bonus guidance released May 16th was issued. This notice, linked here , updates previously omitted project components from the Solar PV table in Table 1.
IR-2024-144	May 22, 2024	The Department of the Treasury, the Internal Revenue Service, and the Department of Energy announced the opening of the new round of allocations for the Qualified Advanced Energy Project tax credit. $6 billion in tax credits are available to be allocated, including $2.5 billion set aside for designated energy communities, which can be found here . In order to be considered for allocations, concept papers must be submitted by June 21 at 5 p.m. using the 48C Portal, linked here .
IR-2024-142	May 17, 2024	The Department of the Treasury and the Internal Revenue Service announced the rollover of unallocated environmental justice solar and wind capacity allocations from the 2023 Low Income Community bonus credit to the 2024 application period. The 324.8 MW of unallocated capacity are re-allocated to the four categories as shown in this announcement , resulting in 2.1 GW of capacity allocations available for the 2024 application period. The Department of Energy has also announced that this year’s application period opens May 28, 2024 at 9:00 am EST, and the initial 30-day window will end June 27, 2024 at 11:59 pm EST. The recording of the 2024 informational webinar can be found here .
IR-2024-140	May 16, 2024	Release of an update to guidance issued on the domestic content bonus. The main updates include expanding domestic content safe harbor to include hydropower and pumped storage projects, and updates the list of manufactured project components for various technologies. The guidance also introduces a new safe harbor method to calculate the adjusted percentage of manufactured projects using standardized classifications of components and cost percentages issued by the IRS. View the notice here .
IR-2024-124	April 29, 2024	The Treasury Department and the Internal Revenue Service have allocated $6 billion of tax credits for projects that expand clean energy manufacturing and recycling and critical materials refining, processing and recycling, and for projects designed to reduce greenhouse gas emissions at industrial facilities. All allocation decisions for this second round will be made by no later January 15, 2025, and applications will be due within 50 days of when the Department of Energy begins the acceptance period, which is anticipated to occur before the end of May 2024. For more details, and to register for an information webinar on May 16 at 12pm Eastern, visit the Department of Energy’s website, here .
IRS-2024-86	March 29, 2024	Release of final regulations and guidance around solar and wind projects eligible for low-income communities. The revenue procedure, linked here [PDF] , provides application and documentation requirements for 2024, further describes the additional selection criteria, and describes the capacity limitations for each of the four categories.
IRS-2024-77	March 22, 2024	Release of additional rules expanding the definition of an energy community for production and investment tax credits. Additional appendices were released identifying areas that will meet either the fossil fuel employment threshold [PDF] or qualify as energy communities in 2023 [PDF] due to meeting the fossil fuel employment threshold and the unemployment rate requirement as of 2022. Energy community frequently asked questions were also updated on the IRS site to formalize these changes. Access the notice here [PDF] . Updated answers to FAQ topics are found here .
IR-2024-61	March 5, 2024	Final regulations released around tax credits with elective payment options for applicable entities and guidance around transferring tax credits. Elective pay frequently asked questions were also updated on the IRS site to formalize these changes. Access the final regulations here . Updated answers to the FAQ topics are found here . Notable updates to FAQ guidance includes topics such as determining an entity’s tax year, eligibility for filing for extensions, and that payments will typically be issued to entities within 45 days of the due date of their annual return, though in some cases this may take more or less time. The White House and Treasury also released a webinar discussing the final rules for elective pay, which can be found here .
Exempt Organizations Update	February 26, 2024	IRS is holding office hours to help with pre-filing registration process for elective payment and transfer of clean energy credits. Office hours are being held weekly on Wednesdays from 1:00-2:30 pm EST between February 28 and April 24, 2024. Registration is required, and each week’s office hours has a separate registration link, all of which can be found here .
IR-2023-252	December 28, 2023	Additional guidance released on domestic content exemptions for projects beginning construction prior to January 1, 2025 and a request to provide comments for forthcoming proposed regulations on phaseouts for elective payment and domestic content exemptions. Access the IRS notice here .
IR-2023-249	December 22, 2023	Release of free pre-filing registration tool for elective payments and a corresponding user guide. Recommendation to submit pre-filing registration at least 120 days prior to filing the tax return to claiming elective pay. Access the user guide here .

Resources

• Department of Treasury’s IRS Resource Hub
• The White House’s Direct Pay Through the Inflation Reduction Act Guidance
• IRS’s Elective Pay and Transferability Guidance