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Renewable Energy Tax Credits News Briefs - December 2023

The U.S. Department of Energy (DOE) Oct. 17 released an updated frequently asked questions document and applicant user guide for the low-income communities bonus program for renewable energy investment tax credits (ITCs). Created through the Inflation Reduction Act (IRA) of 2022, the low-income community bonus program provides an additional 10% or 20% ITC bonus for qualified solar and wind energy facilities with a combined 1.8 gigawatts of capacity annually in four categories: qualified low-income residential buildings (200 MW), located in low-income communities (700 MW) located on Indian Land (200 MW) and qualified low-income economic benefit projects (700 MW). The DOE will review applications and make recommendations to the Internal Revenue Service (IRS), which will allocate up to the cap for eligible solar and wind capacity this year through the competitive allocation process. Applicants generally must apply for a particular category, and applications submitted in the 30-day window starting Oct. 19 will be considered together. Depending on the availability of capacity, DOE/IRS may reallocate capacity from one category to another and applications will continue to be accepted through early 2024.

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Greenprint Capital Management provided $92 million in renewable energy investment tax credit (ITC) equity for Spearmint Energy’s battery energy storage project in west Texas. The project, named Revolution, is a 150 MW, 300 MWh battery energy storage project located in west Texas. The endeavor is one of the first applications of the ITC structure for a standalone battery energy storage system since the 2022 passage of the IRA.

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NextEra Energy was on target to sell $400 million in transferable tax credits in 2023 and bring in approximately $1.6 billion in tax credit sales by 2026, according to statements in October by its chief financial officer, Kirk Crews. NextEra leadership identified interconnection backlogs and access to capital as the two greatest challenges facing renewable energy developers.

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Alaskan Sens. Lisa Murkowski and Dan Sullivan introduced legislation in September to spur hydroelectric power upgrades. The legislation aims to support upgrades at existing hydroelectric dams in Alaska to increase the production of clean energy. The legislation would establish a 30% federal tax incentive.

Journal Category:

Renewable Energy Tax Credits

Authors:

Novogradac

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