Inflation Reduction Act Tracker

Sabin Center for Climate Change Law
Environmental Defense Fund

IRA Section 13501 – Advanced Energy Project Credit

Section 13501 of the IRA expands the Advanced Energy Project credit in section 48C of the IRC. Prior to enactment of the IRA, the credit was available for qualifying advanced energy projects that re-equipped, expanded, or established an industrial or manufacturing facility for the production or recycling of renewable energy equipment, energy storage, electric grid modernization components, equipment for producing renewable or low carbon fuels, equipment for capturing, removing, or sequestering carbon oxide, and certain other energy property designed to reduce greenhouse gas emissions. The IRA expands the list of qualifying projects to also include projects that:

  1. establish or expand facilities producing residential and commercial energy conservation technologies;
  2. establish or expand facilities producing hybrid and electric vehicle components and associated charging infrastructure;
  3. re-equip industrial or manufacturing facilities with equipment designed to reduce greenhouse gas emissions by at least 20%; and
  4. re-equip, expand, or establish industrial facilities for processing, refining, or recycling critical minerals.

Prior to enactment of the IRA, section 48C of the IRC capped the total amount of credits that could be allocated to advanced energy projects at $2.3 billion. The IRA provides for the allocation of an additional $10 billion worth of credits. At least $4 billion worth of credits must be allocated to projects located in census tracts that had a coal mine close after December 31, 1999 or a coal-fired electric generating unit retire after December 31, 2009 or are immediately adjacent to such tracks and, prior to the enactment of the IRA, had no project which received an allocation of credits under section 48C of the IRC.

Eligible Entities:

Corporate Entity, Technology Developers/Manufacturer

Environmental Justice Considerations:

$4 billion of the appropriated funds must be allocated to underserved community census tracts.

Current Status:

Repealed or Modified by Congress

Section 70515 of the One Big Beautiful Bill Act of 2025 (Public Law 119-21) restricts allocations of section 48C advanced energy project credits (IRA section 13501) to $10 billion, regardless of whether a given applicant’s certification has been revoked.

Implementation Status at End of Biden Administration:

Complete

Treasury shifted applications for section 48C Advanced Energy Project Credits to a new Section 48C portal and announced the completion of the second round competition for Advanced Energy Project Credits. Treasury administered 250 Section 48C credits across two rounds of funding. Treasury allocated $10 billion for initial rounds of section 48C credits, spent in $4 billion and $6 billion batches and with 40% of funding reserved for projects in energy communities with closed coal mines or coal plants. Treasury’s notice 2024-36 provides that the IRS will evaluate the need for a third allocation round on January 15, 2025.