The Bottom Line
Under Section 48, taxpayers may receive a tax credit for a percentage of costs incurred when installing solar, wind, and other clean energy projects. The Final Regulations, effective December 12th, clarify certain questions arising from the Proposed Regulations around the ownership and definitions of clean energy property, such as biogas property and energy storage.
Action Items and Important Dates
Any company that begins construction for qualifying projects before the end of 2024 may claim the clean energy investment tax credit under Section 48, but if construction begins in 2025 the project would need to qualify under the new Section 48E clean electricity investment credit introduced by the Inflation Reduction Act which requires energy projects to be “tech-neutral”. Currently, Proposed Guidance is available for Section 48E, with Final Guidance expected from the IRS before the end of the year.1
- 1“Treasury Pushes to Finalize Energy Credit Rules by This Year,” news.bloomberglaw.com, October 1, 2024.