The Department of Energy (DOE) will begin accepting applications for its Low-Income Communities Bonus Credit Program on October 19, 2023. This program was established by Treasury and the Internal Revenue Service (IRS) pursuant to the Inflation Reduction Act of 2022 (P.L. 117-169), which added a new Section 48(e) to the Internal Revenue Code. Section 48(e) increases adoption of and access to renewable energy facilities in underserved and environmental justice communities, encourages new market participants, and provides substantial benefits to underserved communities and individuals that have been historically marginalized from economic opportunities and overburdened by environmental impacts.
The Low-Income Credit Program under Section 48(e) is administered by the DOE’s Office of Economic Impact and Diversity (OEID) in partnership with Treasury and the IRS. This program aims to provide a 10 to 20 percentage point credit boost for renewable energy projects in low-income communities. A 10 percentage point increase is available to eligible solar and wind facilities installed in low-income communities or on Tribal Land and a 20 percentage point credit increase is available to eligible solar and wind facilities that are part of a qualified low-income residential building or a qualified low-income economic benefit project.
The annual Capacity Limitation has been divided across the following facility categories—
- Category 1 – Located in a Low-Income Community: 700 megawatts;
- Category 2 – Located on Tribal Land: 200 megawatts;
- Category 3 – Qualified Low-Income Residential Building Project: 200 megawatts; and
- Category 4 – Qualified Low-Income Economic Benefit Project: 700 megawatts.
To view application requirements, please view DOE’s website by clicking here. The Applicant Portal will go live on October 19, 2023 and can be accessed on DOE’s website. Any questions requesting tax-related guidance or tax filing support should be directed to the Applicant’s tax professional, accountant, or attorney. Program related questions and Applicant Portal assistance should be directed to EJBonusSupport@hq.doe.gov.
For more information, please contact Brian Howard, USET SPF Senior Policy Analyst, at bhoward@usetinc.org.
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