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The US Government unlocked hundred of billions of dollars in tax credits in the Inflation Reduction Act of 2022. Many of these tax credits are transferable, making it significantly easier for project developers to monetize these tax credits, and avoid the headache and brain damage of complicated tax equity partnership or sale leaseback structures.
Basis is already accepting Solar, Storage, and EV Charging Infrastructure technology projects looking to monetize ITC credits. We look forward to hearing from other technologies developers about adding their credits as well. Please reach out to learn more.
§30C Alternative Fuel Vehicle Refueling Property Credit
Qualifies for Transferability?
Tax Credit Amount
Yes, and this includes EV charging charging stations built by corporations
30% tax credit, but only for property in an eligible census tract. An eligible census tract for this credit includes low-income communities as defined under §45D(e).
§45 Renewable Electricity Production Tax Credit
$27.50/MWh for 2022, adjusted for inflation thereafter
§45Q Carbon Dioxide Sequestration Credit
$85 Credit per metric ton of qualified carbon oxide captured and sequestered (and $85 for geological sequestration aka “point source”). Credit can be claimed for carbon oxide captured during the 12-year period beginning on the date a qualified facility was originally placed in service.
§45U Zero-Emission Nuclear Power Production Credit
Credit of $3 + $15 (if meets wage and apprenticeship guidelines), adjusted for inflation, per MWh of electricity generated.
§45V Clean Hydrogen Production Credit
Credit of up to $3 per kilogram (kg) based on the life-cycle greenhouse gas emissions rate of CO2 produced at a qualifying facility during the facility’s first 10 years of operation.
§45X Advanced Manufacturing Production Credit
Variety of credit amounts depending on the underlying technology (we’ll follow up with a more detailed post on this at a later date).
§45Y Electricity Production Credit
Beginning in 2025, the traditional ITC and PTC will generally no longer apply.
They will be replaced by new technology-neutral credits. Eligibility for these credits generally requires that the facility's GHG emissions are no greater than zero.
The 45Y base credit value is 0.3 cents per kWh with a bonus credit (base credit multiplied by five) if prevailing wage and apprenticeship requirements are met.
§45Z Clean Fuel Production Credit
For these facilities the applicable amount ranges from $0.12 to $0.60 per kilogram of qualified clean hydrogen produced. If the qualified clean hydrogen facility meets the prevailing wage and apprenticeship requirements, the credit amount is multiplied by five, resulting in an applicable amount that ranges from $0.60 to $3.00 per kilogram of clean hydrogen produced. The applicable amount is adjusted annually for inflation.
§48 Energy Investment Tax Credit
The IRA extends the ITC for solar energy property and most other ITC-eligible property until the end of 2024 (Geothermal credit will be extended until 2035).
Like the PTC, the ITC will transition to technology-neutral in 2025.The IRA expands what is eligible for the ITC, including standalone energy storage technology.
Base tax credit is 6 percent, with a bonus credit of 30 percent, if prevailing wage and apprenticeship requirements are met. Guidance has been published here for this, and we will be publishing a note on prevailing wage and apprenticeship requirements.
In addition to the Wage & Apprenticeship Standards, additional 8-10% adders are available for Domestic Content, Energy Communities, and Low Income Communities. Guidance is pending from IRS on qualifying details, but we are prepared to size these adders for 2023 credits subject to guidance confirmation.
§48C Qualifying Advanced Energy Project Credit
This credit will be available for a wide range of renewable energy equipment manufacturing facilities. Base tax credit is 6 percent, with a bonus credit of 30 percent, if prevailing wage and apprenticeship requirements are met. This is to motivate and support the domestic content requirements as well.
§48E Clean Electricity Investment Credit
As in the case of 45Y, beginning in 2025, the traditional ITC and PTC will generally no longer apply. They will be replaced by new technology-neutral credits. Eligibility for these credits generally requires that the facility's GHG emissions are no greater than zero.