Sign Up For Novogradac Industry Alert Emails

Low-Income Communities Bonus Credit 2024 Program Year is Now Open with Additional Rollover Capacity from Previous Round

Published by Dirk Wallace on Tuesday, May 28, 2024 - 5:43AM

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) had two announcements May 13 regarding the 2024 program year of the Low-Income Communities Bonus Credit program:

  1. applications open today at 9 a.m. Eastern, and 
  2. approximately 325 megawatts (MW) of available capacity will rollover to the 2024 program year. This will add to the annual 1.8 gigawatts (GW) of capacity for a total of more than 2.1 GW of capacity available in 2024.

"This groundbreaking incentive to invest in low-income communities created by President Biden’s Inflation Reduction Act is creating jobs and opportunity while lowering energy costs for communities that were long underinvested in," said U.S. Deputy Secretary of the Treasury Wally Adeyemo in a press release on the Treasury’s website. "In the program’s first year, we saw sky-high demand for solar and wind investments, and we expect that momentum to continue as President Biden’s economic agenda ensures all Americans benefit from the growth of the clean energy economy."

Learn more about the 2024 program year in this Notes from Novogradac blog

About the Program

The program, authorized by the Inflation Reduction Act,  provides "adder" investment tax credit (ITC) percentages (see chart below for more details) for solar or wind facilities built in low-income communities or in connection with federally subsidized residential buildings, including low-income housing tax credit properties, as well as facilities that benefit households with lower incomes (at least 50% of the energy produced by these facilities must serve households with incomes below 80% of the area median income).

Learn more about the basics of the program in this Notes from Novogradac blog and learn about qualifying under Categories 3 and 4 in this Notes from Novogradac blog

2024 Program Year Application is Open 

Again, applications for the second year of the Low-Income Communities Bonus Credit program open today at 9 a.m. Eastern for the 2024 program year. 

All applications submitted within the first 30 days, by 11:59 pm ET on June 27, will be treated as submitted on the same date and at the same time. Following the initial 30-day period, the U.S. Department of Energy (DOE) will continue to accept applications on a rolling basis.  

"The Low-Income Communities Bonus Credit Program is already boosting access to clean, reliable power in underserved communities, helping lower energy costs for low-income families, and creating good-paying jobs," said John Podesta, Senior Advisor to the President for International Climate Policy in a press release on the Treasury’s website. "The program’s impact will grow even more in its second year thanks to the increased available capacity."

The IRS will allocate the total capacity (more than 2.1 GW) for the 2024 program year, which includes the 324.8 MW of rollover available capacity, in the following manner:

Blog Graphic: Low-Income Communities Bonus Credit Program 2024 Allocation Capacity

Announcement 2024-25 breaks down how much carryover allocation from 2023 is in each category for the 2024 program year. 

For the 2024 program year, at least 50% of the capacity limitation in each facility category will be reserved for qualified facilities meeting certain additional selection criteria (ASC). Facilities may qualify for ASC based on two factors: ownership and geography. 

If an applicant claims that it meets the ASC for ownership criteria, they must provide proof they are a tribal enterprise, Alaskan Native corporation, renewable energy cooperative or a qualified renewable energy company, according to Rev. Proc. 2024-19. The applicant must provide documentation which demonstrates that the applicant entity meets the at least 51% ownership requirements.

If an applicant claims that it meets the ASC for geographic criteria with respect to Categories 1, 3, or 4, the qualifying facility must be located in a persistent poverty county or in a census tract that is designated as disadvantaged in the Climate and Economic Justice Screening Tool, according to Rev. Proc. 2024-19

Applicants applying under the ASC will be prioritized over other applications. 

DOE, Treasury Provide Informative Webinar 

Treasury and the DOE hosted a webinar May 16 about the 2024 program year application process. A recording of the webinar will be posted on the DOE webpage. This is an informative webinar useful to those new to the Low-Income Communities Bonus Credit program.

The webinar provides an overview of the program, critical information on the 2024 program year and takes potential applicants through the application process step-by-step. 

Additional guidance, including the 2024 Revenue Procedure, final regulations and program resources to help applicants prepare their submissions, is available on the DOE program homepage.

Novogradac Can Help 

With applications opening today, time is of the essence. The 30-day window to submit applications will be over quickly. Reach out to a Novogradac professional with any specific questions.  

The Energy Mapping Tool is a great resource for those interested in the Low-Income Communities Bonus Credit program. It is designed to provide users with the means to see if an area might be eligible under certain bonus credit program criteria, including the Low-Income Communities Bonus Credit program.  

The Renewable Energy Working Group provides a platform for renewable energy industry participants who wish to be in the forefront of this industry. To join, click here.

Learn more about Novogradac's expertise and many services