The US Department of the Treasury and the IRS have issued final rules for the Clean Electricity Investment and Production Tax Credits under tax code sections 45Y and 48E. These technology-neutral credits are designed to lower energy costs for American families and businesses while supporting increased energy demand driven by significant US economic investments. According to the Department of Energy, these provisions, along with the Inflation Reduction Act and Bipartisan Infrastructure Law, could save American families up to $38 billion on electricity bills by 2030.

Encouraging clean energy innovation

The credits aim to foster innovation by supporting the development of new zero-emission technologies and investments in established solutions such as wind, solar, hydropower, and nuclear energy. The final rules clarify which technologies qualify for these credits and outline processes for including combustion and gasification technologies through lifecycle analysis. Treasury and the IRS plan to release an Annual Table soon to confirm qualifying technologies, ensuring greater clarity for clean energy stakeholders.

Supporting energy resilience and job creation

US Secretary of Energy Jennifer M. Granholm highlighted the impact of these measures, stating that the guidance enables clean energy producers to scale up solutions that lower costs for families and provide forward-looking careers. Existing Production and Investment Tax Credits will remain available for projects starting before 2025, while the new Clean Electricity Credits will apply to qualifying projects placed in service after December 31, 2024.

Stakeholder feedback and rule refinement

Treasury emphasized that the final rules reflect input from stakeholders and maintain most proposed provisions. Any future updates to the list of zero-emissions technologies or lifecycle analysis models will involve thorough review and analysis by the Department of Energy’s National Labs in consultation with other experts.

Industry Reactions

In response to the move, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), issued the following statement: “American solar and storage companies are investing hundreds of billions of dollars to build energy projects that power our country, including major infrastructure like data centers and manufacturing plants. The technology-neutral energy tax credit provides the long-term policy certainty companies need to invest in US energy innovation and that, in turn, creates a stronger foundation for our energy security as well as thousands of well-paying jobs.

In addition, Ross also stressed the importance of this tax credit further incentivizing solar and storage projects to use US made components, such as solar modules, trackers and batteries. “Attempts to repeal these rules will only make it easier for China to win the race for global solar market dominance, while killing American jobs and much-needed economic opportunities.” “We urge lawmakers to protect these tax credits to drive job growth and continue to build clean energy made in the US, she said.”

For its part, the American Clean Energy Association (ACP) shared a statement from its executive director, Jason Grumet: “The tech-neutral tax credits are critical for supporting the development of a wide mix of new energy resources that our nation will need to meet rising electricity demand. The transition from technology specific incentives to a performance-based system is key to encouraging broad technology innovation and increasing overall program effectiveness. Treasury’s final tech-neutral guidance gives investors and developers the certainty needed to kickstart new energy projects creating new jobs and enhancing our nation’s energy security.”

Strengthening domestic standards and opportunities

The National Laboratories are conducting lifecycle emissions analyses of electricity production with certain biomass technologies, offering clarity for taxpayers. To maximize credits, taxpayers must meet prevailing wage standards and employ registered apprentices, ensuring well-paying jobs and career opportunities. Additional bonuses are available for projects in energy communities or meeting domestic content standards, further supporting job creation and economic growth in the clean energy sector.