The Inflation Reduction Act of 2022, Section 48C Advanced Energy Credit (AEC) is a competitive tax credit program that requires manufacturers apply in order to receive an allocation. The current credit, Section 48C Advanced Energy Credit, includes $10 billion in new 30% investment tax credits and broadens what is deemed to be eligible energy property a company can invest in to earn the credit. The credit value is 30% of the project capital investment that is deemed to be eligible energy property. Explore examples of qualified projects here.
The 48C program has incorporated a pre-application process which seeks concepts for expansion of their production facilities to know where advanced manufacturing needs exist. We are recommending that most any manufacturer with a current or planned energy related project consider applying. Projects will be scored after an initial review by the Department of Energy (DOE) with those scoring highest given the greatest likelihood of being awarded a tax credit allocation. This is also a great opportunity to get feedback on a project should you be seeking other Federal loan sources.
For those awarded, this credit will be significant, accounting for 6% or 30% of the capital investment in a qualified advanced energy project.
If you are thinking of applying for Section 48C, it is likely your competitors are too.
The first $4 billion of funding opens for application on May 31, 2023, for 60 days. While additional guidance around domestic content is expected any week, now is the time to prepare pre-application materials. For manufacturers looking for a time-saving shortcut, our Section 48C application portal is the answer.
Our portal enables users to grant access to their team members, so team collaboration happens seamlessly. We’ve helped clients apply for and win millions in competitive tax credits. Using that experience, we built the portal to make pre-application as easy as possible.
We’re with you from pre-application through formal concept papers and finally, if awarded, we can help ensure your project complies to limit credit recapture.
If you are interested in learning more about Section 45X, connect with our IRA specialists here.