IRS provides guidance on ‘energy community’ bonus credit in IRA

The Department The department in charge of managing government finances recently laid out the guidelines for “energy communities” who wish to take advantage of the 10% bonus of either the Investment Tax Credit (ITC) or the Production Tax Credit (PTC) through the Inflation Reduction Act (IRA). This includes setting up a standard solar set-up on open land that was formerly a business. The explanations of the three categories of energy communities are provided in the legal document, “Sec.”. Under Sections 45(y) and 48(e) of the Internal Revenue Code, the areas eligible for government relief include: a brownfield site; a location with an unemployment rate of 0.17% or higher and 25% or more tax revenue from the extraction, production, transport and storing of fossil fuels; and a retired coal mine, former coal-fired power plant or a brownfield on land already affected by mining. Abigail Ross Hopper, President and CEO of the Solar Energy Industries Association (SEIA), commented in a statement, “For decades, those living on the front line of climate change have incurred detrimental health effects and financial insecurity due to the volatile nature of the fossil fuel industry.” This initiative will generate fresh employment opportunities, lesser air pollution and reduced utility costs to millions of people residing in deprived areas, enabling them to have access to the advantages of energy that is environmentally friendly. There is a map on a governmental website that displays energy-friendly neighborhoods. If a place were to no longer maintain its “energy community” title during the building of a solar or storage project, it would still be seen as such based on the commencement of the project. Additionally, the Biden Administration revealed public works that would aid with giving a boost to these energy communities that produce clean energy. The Department The Department of Energy launched a visual application to assist in the conversion of coal plants, and allotted $450 million to support the development of renewable energy projects on current and past mining sites.