Treasury Releases New Guidance on the Qualifying Advanced Energy Project Credit Program

On May 31, 2023, the US Department of Treasury and the IRS released additional information and guidance about an energy credit program the agencies established on February 13, 2023 under section 48C of the Internal Revenue Code. The Qualifying Advanced Energy Project Credit program, originally enacted by the American Recovery and Reinvestment Act of 2009 and amended by section 13501 of the IRA, allocates $10 billion of credits for investments in eligible qualifying advanced energy projects. The additional guidance provides general information about the program, including definitions of important terms, clarification on projects placed in service prior to being awarded an allocation of qualifying advanced energy project credits, the process for submitting an application to the program, the selection criteria used to evaluate projects, and the disclosure of certain information. The program aims to drive investment in hard-hit coal communities and underserved communities by investing in energy security. To that end, the project sets aside $4 billion specifically for communities with closed coal mines or retired coal-fired power plants. Taxpayers must apply for initial certification of their potentially qualified investments to be eligible for the 48C credit. The initial round of applications opened on May 31, 2023 and closes on July 31, 2023.