RTC Policy Finder

Section 48E Clean Electricity Investment Credit

The Sec. 48E Clean Electricity Investment Credit was introduced through the Inflation Reduction Act in 2022. This section is technology-neutral, qualifying any facility used to generate electricity for which the greenhouse gas emissions rate is not greater than zero. Prior to IRS guidance, the text is unclear regarding technological applicability, aside from the explicit inclusion of thermal storage for heating or cooling buildings. The credit likely also allows for investment in zero-carbon combined heat and power systems but generally does not apply to most renewable thermal technologies. The credit essentially replaces the Sec. 48 Investment Tax Credit, creating incentives for facilities placed in service in or after 2025. The 6% base rate may be increased to 30% if the project pays prevailing wage and meets apprenticeship requirements. This credit cannot be claimed if the facility also claims the sections 45 PTC, 45J, 45Q, 45U, 45Y, 48, or 48A tax credits. The credit will begin being phased out for facilities constructed beginning in 2032 or the year following when greenhouse gas emissions from the production of electricity in the U.S. are equal to or less than 25% of 2022 levels, the applicable year being whichever is later. The credit ends in the fourth calendar year after the determined applicable year.

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