05/01/2024

IRS Announces Application Process for $6 Billion Allocation of Clean Energy Manufacturing and Recycling Project Incentives

On April 29, 2024, the IRS and the Department of Energy (DOE) announced the process by which they will accept and process applications on round two of the Section 48C(e) qualifying advanced project energy tax credit. Section 48C(e) provides tax incentives of up to 30% on qualifying clean energy manufacturing and recycling, greenhouse gas emission reduction, and critical material projects.

During round one, the IRS allocated approximately $4 billion of Section 48C credits, with approximately $1.5 billion in credits allocated to projects located in Energy Communities Census Tracts. For round two, the IRS expects to allocate approximately $6 billion of Section 48C credits, with about $2.5 billion in credits to be allocated to projects located in Energy Communities Census Tracts. The IRS will evaluate whether any credits remain unallocated at the close of round two and determine if another allocation round is needed.

The IRS/DOE includes the following timeline for this second round of Section 48C applications:

  • DOE will schedule an information seminar to be held no later than May 31, 2024.
  • Taxpayers must submit a detailed concept paper via the Qualified Advanced Energy Project Credit Program Applicant Portal, which will open no later than May 28, 2024, and close at 5 PM Eastern time within 30 calendar days after the portal opens.
  • DOE will send a letter to the taxpayer encouraging or discouraging submission of the full application on a rolling basis. A letter of discouragement does not preclude a taxpayer from filing a full Section 48C application.
  • To be considered for the Section 48C(e) program, a taxpayer must submit its full application no later than 50 calendar days after DOE opens the portal for applications in the summer of 2024 (specific date TBD). The IRS will make all round two allocation decisions on a rolling basis and release its awards no later than January 15, 2025.

Pierce Atwood attorneys were actively involved in multiple applications for Section 48C awards in round one, and secured awards for every application we supported.

We are here to support your assessment as to whether your project qualifies for a Section 48C award and, if so, we can help prepare the necessary concept paper and application materials. For questions or assistance with any upcoming 48C project application, please contact firm energy attorneys Joe Donovan or Nicholas Salalayko.