IRS Provides Guidance Energy Projects for Low-Income Communities and Qualifying Advanced Energy Projects

On February 13, 2023, the Internal Revenue Service (IRS) published guidance on how it will allocate 1.8 gigawatts of capacity in bonus renewable energy Investment Tax Credits (ITCs) to low-income communities as provided in the Inflation Reduction Act (IRA) as well as guidance on the qualifying advanced energy project credit program. See the relevant notices below:

• Notice 2023-18 dated February 13, 2023. IRS and Treasury provide guidance on the Qualifying Advanced Energy Project Credit. The Notice establishes the section 48C(e) program to allocate $10 billion in credits ($4 billion of which may only be allocated to projects located in certain energy communities census tracts). The notice also provides initial program guidance.
• Notice 2023-17 dated February 13, 2023. Treasury and IRS provide guidance on energy projects for low-income communities. The Notice establishes the Low-Income Communities Bonus Credit Program and provides initial guidance for potential applicants for allocations of calendar year 2023 capacity limitation.