§48C: The Qualifying Advanced Energy Project Tax Credit Program

Earn tax credits for increasing clean energy production.

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What is the 48C Tax Credit and who Qualifies?

The 48C Tax Credit, formally named the Qualifying Advanced Energy Project Credit Program, is a federal incentive aimed at boosting clean energy manufacturing, essential material refining, and recycling. This program offers an investment tax credit of up to 30% for approved projects. This program is designed for: companies who are making qualifying investments into clean energy manufacturing, both for-profit businesses and tax-exempt entities, and building owners.

At Leyton, we’re not just about maximizing tax incentives; we’re about fueling growth. Our experts are here to help you get the most out of the 48C tax incentive and others that you may qualify for. Schedule a call to discuss how we can assist you.

A Project is Deemed Eligible Under IRC 48C if it:

For a project to be eligible, it must have a concept paper and application in the portal. Concept papers are required to be forward-looking (i.e., must apply for 48C before construction/improvement of qualifying facility).

construction
A.

Re-equips, expands or establishes an industrial or a manufacturing facility for the production or recycling of specified advanced energy property.
home_repair_service
B.

Re-equips industrial or manufacturing facilities with equipment to cut greenhouse gas emissions by at least 20%, as approved by the Secretary of the Treasury.
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OR C.

Re-equips, expands or establishes an industrial facility for the processing, refining or recycling of critical materials.

Project Criteria

1
The project does not include any portion of a project for the production of any property that is used in the refining or blending of any transportation fuels (other than renewable fuels).
2
The Secretary of the Treasury has certified pursuant to §48C(e)(3) that part or all of the qualified investment in the qualifying advanced energy project is eligible for a § 48C credit;

Advanced Energy Property Defined :

What is a 48C property? keyboard_arrow_down keyboard_arrow_up

○ Property designed for use in the production of energy from the sun, water, wind, geothermal deposits (within the meaning of § 613(e)(2)), or other renewable resources.

○ Property designed to produce energy conservation technologies (including residential, commercial, and industrial applications).

○ Property designed to capture, remove, use, or sequester carbon oxide emissions.

What classifies as 48C equipment? keyboard_arrow_down keyboard_arrow_up

○ Equipment designed to refine, electrolyze, or blend any fuel, chemical, or product which is renewable, or low-carbon and low-emission.

○ Electric grid modernization equipment or components.

○ Hybrid vehicles with a gross vehicle weight rating of not less than 14,000 pounds as well as technologies, components, or materials for such vehicles; or Other advanced energy property designed to reduce greenhouse gas 8 emissions as may be determined by the Secretary.

What is 48C infrastructure? keyboard_arrow_down keyboard_arrow_up

○ Fuel cells, microturbines, or energy storage systems and components.

○ Light-, medium-, or heavy-duty electric or fuel cell vehicles, as well as technologies, components, or materials for such vehicles, and associated charging or refueling infrastructure.

48C Prevailing Wage Requirements

The 48C Tax Credit can yield up to 30% of the qualified investment if prevailing wage requirements are met. The Inflation Reduction Act of 2022 offers higher tax credits for clean energy projects that meet wage and apprenticeship standards. On June 25, 2024, the IRS issued regulations clarifying these rules, with some areas still awaiting final guidance.
Section 48C Background

The Inflation Reduction Act (IRA) allocated $10 billion for the Qualifying Advanced Energy Project Credit Allocation Program under section 48C(e). This investment credit, initially introduced by the American Recovery and Reinvestment Act of 2009, has been renewed and expanded by the IRA. To establish the program and provide initial guidance, the Internal Revenue Service and the Department of Treasury issued Notice 2023-18, followed by additional guidance in Notice 2023-44.

FAQs

All your 48C questions in one place:

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How much was invested by the DOE 48C in 2022? keyboard_arrow_down keyboard_arrow_up

$10 billion was invested in 2022 by the DOE. $4 billion must be allocated only to those located in specific energy communities.

What is the earliest date that property can be placed in service to qualify for a Section 48C credit allocation? keyboard_arrow_down keyboard_arrow_up

The earliest a taxpayer can place eligible property in service is after receiving an allocation of § 48C credits for that property.

Is there a maximum credit on the § 48C credit per project? keyboard_arrow_down keyboard_arrow_up

There is no maximum credit per project specified.

Can costs be incurred prior to the allocation award date, provided the eligible property is not placed into service before the 48C award date? keyboard_arrow_down keyboard_arrow_up

Yes, provided the eligible property has not been placed in service and the applicant meets other program requirements, they can apply for an allocation of § 48C credits for their qualified investment in eligible property. Property placed in service before receiving an allocation under the § 48C(e) program is not eligible for the credit.

Can universities, public schools, and private schools take advantage of 48C awards? keyboard_arrow_down keyboard_arrow_up

Tax-exempt and governmental entities such as universities, public schools, and private schools can utilize the § 48C credit by utilizing the optional payment provision in accordance with § 6417, provided they meet the criteria outlined in §§ 48C and 6417.

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