Treasury Unveils Game-Changing Final Guidelines for Universal Clean Energy Credits

With definitive regulations established, technology-neutral clean electricity credits will stimulate the economy, create well-paying jobs, and assist American households in saving up to $38 billion on electricity expenditures through 2030

WASHINGTON – Today, the U.S. Department of the Treasury (Treasury) and the IRS unveiled final regulations for the Clean Electricity Investment and Production Tax Credits – commonly referred to as the technology-neutral credits – in tax code sections 45Y and 48E.

These credits play a crucial role in reducing energy expenses for American households and businesses while generating abundant, affordable power to satisfy the increased demand brought on by significant investments in the U.S. economy. An analysis from the Department of Energy indicates that the technology-neutral credits, together with various provisions from the Inflation Reduction Act and Bipartisan Infrastructure Law, are anticipated to save American families as much as $38 billion on electricity costs through 2030.

The Clean Electricity Credits foster innovation by allowing new zero-emissions technologies to evolve over time, while simultaneously offering lasting incentives for companies to invest in clean energy technologies already contributing to the clean energy investment and manufacturing surge. The final rules published today clarify what clean electricity zero-emissions technologies are eligible for the credits – including wind, solar, hydropower, marine and hydrokinetic, geothermal, nuclear, and specific waste energy recovery properties. Treasury and the IRS are expected to release the first Annual Table confirming this list of qualifying technologies very soon. The final rules further provide guidance to elucidate how combustion and gasification technologies may qualify in the future – detailing how lifecycle analysis assessments compliant with the statute will be executed.

“The final regulations published today will help ensure that America’s clean energy investment boom continues – reducing utility expenses for American households and small businesses, generating good-paying construction jobs, and bolstering energy security by enhancing the U.S.’s resistance to price fluctuations,” stated U.S. Secretary of the Treasury Janet L. Yellen.

“America’s clean energy boom is not happenstance; it’s President Biden’s industrial strategy in practice: utilizing a spectrum of incentives to expedite innovative carbon cutting technologies and enhance the nation’s energy resilience,” remarked U.S. Secretary of Energy Jennifer M. Granholm. “Today’s conclusive guidance provides clean energy producers the clarity necessary to implement more clean energy solutions on a large scale, reducing costs for a greater number of American households and delivering future-oriented career opportunities for America’s workforce.”

The existing Production Tax Credit and Investment Tax Credit will remain accessible to projects that commenced construction before 2025. Projects that are placed into service after December 31, 2024, will qualify for the new Clean Electricity Credits.

The final rules published today reflect comprehensive consideration of stakeholder feedback and primarily retain the rules as proposed. The final rules also affirm that future modifications to the list of zero-emissions technologies or the designation of a lifecycle analysis model that may be utilized to ascertain emissions rates must be accompanied by an analysis prepared by the U.S. Department of Energy’s National Labs, in consultation with interagency and other experts.

The National Labs are already studying the lifecycle emissions of electricity generation using specific biomass technologies, based on the requirements outlined in the final rules. Treasury anticipates that this analysis, upon completion, will provide additional clarification for taxpayers.

To obtain the full advantages of the credits, taxpayers must comply with standards for paying prevailing wages and employing registered apprentices, ensuring that more clean energy jobs are well-paying positions and expanding career prospects for workers in the clean energy sector. The technology-neutral Clean Electricity Production and Investment Tax Credits are also eligible for bonus credits related to locating projects in energy communities and meeting specific standards for using domestic content, thereby further promoting robust and geographically diverse job creation and economic opportunity within the flourishing clean energy sector.

###