Last Thursday, the Treasury Department released guidance and began accepting applications for new Internal Revenue Code § 48C, the Advanced Energy Manufacturing Tax Credit, created by the American Recovery and Reinvestment Act. The 30% tax credit will provide up to $2.3 billion “to re-equip, expand or establish” clean energy manufacturing facilities, and is expected to support $7.7 billion in new clean energy investment.
Eligible facilities will produce any of the following:
- property designed for use in the production of energy from the sun, wind, geothermal deposits, or other renewable resources;
- fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles;
- electric grids to support the transmission of intermittent sources of renewable energy, including property for the storage of such energy;
- property designed to capture and sequester carbon dioxide and sequester carbon dioxide emissions;
- property designed to refine or blend renewable fuels (but not fossil fuels) or to produce energy conservation technologies (including energy-conserving lighting technologies and smart grid technologies);
- new plug-in electric drive motor vehicles, or components that are designed specifically for use with such vehicles; or
- other property designed to reduce greenhouse gas emissions as may be determined by the Service.
To obtain the tax credit, a facility must first be certified by the IRS:
the initial application period for this certification runs from August 13, 2009
to December 17, 2009. Applicants must
also submit a simple preliminary application to the Department of Energy (DOE);
more details on the DOE application process are available in this
recent Pierce Atwood publication.
Owners of facilities that are certified by the IRS will receive the tax
credit when the facility enters service. Qualified progress expenditures may also
be available. To receive the credit, the
facility must be placed in service within three yrs, and must show significant
progress toward this goal (including obtaining necessary regulatory approvals)
within one year.
The detailed IRS guidance, including the relevant application forms, can be found here (pdf).
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