CPA & Business Advisory Blog

$150 Million Available under IRC Section 48C Tax Credits for Qualifying Advanced Energy Projects

Phase II of the qualifying advanced energy program is now in effect by re-allocating Phase I credits that remain.  The IRS just announced that $150 million are available under this program for clean energy and energy efficiency manufacturing projects in the United States.  To be considered for any of these credits, taxpayers must submit concept papers to the US Department of Energy (DOE) by 4/9/13 and applications to the DOE and IRS by 7/23/13.

Below are definitions per the Notice.

A qualifying advanced energy project is a project that meets the following requirements:

  1. the project re-equips, expands, or establishes a manufacturing facility for the production of specified advanced energy property or property that, after further manufacture, will become specified advanced energy property;
  2. the Service has certified pursuant to § 48C(d)(2) that part or all of the qualified investment in the project is eligible for a credit under § 48C; and
  3. the project does not produce any property which is used in the refining or blending of any transportation fuel (other than renewable fuels).

Specified advanced energy property means any of the following:

  1. property designed for use in the production of energy from the sun, wind, geothermal deposits or other renewable resources;
  2. fuel cells, microturbines, or an energy storage system for use with electric or hybrid-electric motor vehicles;
  3. electric grids to support the transmission of intermittent sources of renewable energy, including property for the storage of such energy;
  4. property designed to capture and sequester carbon dioxide and sequester carbon dioxide emissions;
  5. property designed to refine or blend renewable fuels (but not fossil fuels) or to produce energy conservation technologies (including energy-conserving lighting technologies and smart grid technologies);
  6. new plug-in electric drive motor vehicles (as defined by § 30D), qualified plug-in electric vehicles (as defined by § 30(d)), or components that are designed specifically for use with such vehicles, including electric motors, generators, and power control units; or
  7. other property designed to reduce greenhouse gas emissions as may be determined by the Service as described in section 3.06 of this notice.

Eligible property is any property (other than a building or its structural components) that meets the following requirements:

  1. the property is necessary for the production of specified advanced energy property
  2. the property is

    1. tangible personal property, or
    2. other tangible property (not including a building or its structural components) that is used            as an integral part of the qualifying advanced energy project; and
  3. depreciation is allowable with respect to the property.

Have questions about these tax credits for Qualifying Advanced Energy Projects? Post a comment below or contact our Life Sciences and Innovation Group at 440-449-6800.

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