On March 22, 2024, Treasury released guidance on eligibility requirements for the bonus for clean energy projects located in energy communities. The energy community bonus provides up to a 10% bonus to production tax credit or investment tax credits under IRA sections 13701 and 13702. The IRA designates energy communities as census tracts near coal mine or coal power plant closures; areas with significant local tax revenue or employment from the fossil fuel sector and higher than average unemployment rates; and Brownfield sites, which are properties contaminated by hazardous materials or other pollutants.
The guidance clarifies “fossil fuel employment;” includes appendices listing additional metropolitan statistical areas (MSAs) and non-MSAs that qualify as energy communities for 2023; lists MSAs that would potentially qualify for future years, depending on local unemployment rates; permits offshore wind facilities to attribute their nameplate capacity to additional property— to supervisory control and data acquisition system equipment that are owned by the owner of the offshore wind project and are located in eligible ports; clarifies that where a project has multiple points of interconnection, under this guidance, those projects may now look to any land-based power conditioning equipment up to the points of interconnection for purposes of determining energy community status. The IRS is also posting additional frequently asked questions clarifying brownfields eligibility.