Treasury Issues Guidance on Qualifying Advanced Energy Project Credit

On February 13, 2023, the Department of the Treasury (Treasury) issued initial program guidance on the IRC section 48C Qualifying Advanced Energy Project credit program, under which $10 billion in tax credits will be allocated, including $4 billion for projects in energy communities. The notice provides general rules for determining the section 48C credit, the definitions of advanced energy projects, and procedures for allocating credits. Treasury anticipates at least two funding allocation rounds under the program, with the first round of funding to be allocated beginning on May 31, 2023. Round 1 will allocate $4 billion of funding, including $1.6 billion for energy community projects. Additional funding will be allocated in future rounds. To be considered eligible for credits under the 48C program, taxpayers must submit concept papers to the Department of Energy (DOE) by July 31, 2023. After that initial submission, DOE will determine whether to ask applicants to submit a joint application for DOE recommendation and IRS 48C(e) certification.

Treasury will issue supplemental notice and appendices by May 31, 2023 with guidance on the information applicants must submit in credit allocation applications.