The Inflation Reduction Act (IRA) Section 48E introduces a technology-neutral Clean Electricity Investment Tax Credit (ITC) that replaces legacy Section 48 incentives for zero-greenhouse-gas-emission energy generation facilities placed in service after December 31, 2024.
Tax Credit Economics & Adders
Qualifying clean power facilities receive a base credit of 30% of qualified capital investment provided prevailing wage and registered apprenticeship requirements are satisfied. Strategic bonus adders can boost the total credit to 50% through the 10% Domestic Content Bonus and 10% Energy Community Bonus.
1. Prevailing Wage and Apprenticeship (PWA) Requirements
To avoid a reduction of the credit rate to a punitive 6% base rate, project sponsors must verify two stringent labor requirements:
- Prevailing Wage: All laborers and mechanics must be paid local prevailing wages during construction and for 5 years of post-commercial operations alterations.
- Apprenticeship Quota: At least 15% of total construction labor hours must be performed by qualified apprentices from certified apprenticeship programs.
Model Clean Power CapEx & Emissions Glidepaths
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2. Statutory References & Treasury Regulations
- 26 U.S. Code § 48E: Clean electricity investment credit.
- IRS Notice 2022-61: Prevailing Wage and Apprenticeship Initial Guidance.
- IRS Treasury Decision 9993: Transfer of Certain Credits under Section 6418.
CLEAN ENERGY TAX & FINANCE RESOURCES:
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