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.
| IRS Release | Release Date | Summary |
|---|---|---|
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 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