The Biden administration on Wednesday proposed new tax rules to give big breaks to clean energy projects built in 2025 and potentially decades into the future.
Included in the 2022 Inflation Reduction Act, the Section 45Y and 48E credits replace existing tax credits that have boosted wind, solar and other energy technologies for years despite periodic lapses. The new credits are referred to as “tech-neutral” because they make eligible all electric power projects that eliminate greenhouse gas emissions, including those that use fossil fuels.
Wind, solar, hydropower, marine and hydrokinetic, nuclear fission and fusion, geothermal, and some waste energy recovery projects will immediately qualify as zero emissions. The Treasury Department is seeking comment on combustion and gasificiation projects, like bioenergy with carbon capture and storage.
The proposal issued Wednesday will give a 0.3 cents per kilowatt-hour break to projects that use the 45Y credit and a 6 percent break for projects that use the 48E credit. Bonus credits also can be awarded for specific attributes of a project, like whether it uses domestically produced materials.
