Solar and Storage - Inflation Reduction Act Funding
The Inflation Reduction Act (IRA) has expanded funding sources for investments in manufacturing, installation, and production of clean energy technologies, such as solar and energy storage. This includes new tax provisions for clean energy projects and the expansion of existing grant and loan programs to help fill funding gaps for local governments and other tax-exempt entities.
The resources below outline the overarching changes introduced by the IRA, including expanded funding opportunities and elective pay, which allows tax-exempt entities to receive payment for the full value of clean energy tax credits.
- Inflation Reduction Act Guide for Solar and Storage Projects [PDF]: Detailed information on new and expanded funding opportunities (e.g., elective pay, tax credits, grants, and loans) available to local government and tax-exempt entities.
- Summary Document - Inflation Reduction Act Guide for Solar and Storage Projects [PDF]: A summary of the information on new and expanded funding opportunities available to local government and tax-exempt entities.
- Solar Tax Credit Assessment Tool [XLSX]: This tool is designed help local governments and other tax-exempt entities choose between the IRA’s Investment Tax Credit and the Production Tax Credit for eligible projects.
Supplementary Guidance for Solar and Storage Projects Under the IRA
The following table contains a list of supplementary guidance released by the IRS with respect to the Inflation Reduction Act. Any additional guidance from the IRS will be added as it’s released.
| IRS Release | Release Date | Summary |
|---|---|---|
IRS-2024-86  |
March 29, 2024 | Release of final regulations and guidance around solar and wind projects eligible for low-income communities. The revenue procedure, linked here [PDF] , provides application and documentation requirements for 2024, further describes the additional selection criteria, and describes the capacity limitations for each of the four categories. |
| IRS-2024-77 |
March 22, 2024 | Release of additional rules expanding the definition of an energy community for production and investment tax credits. Additional appendices were released identifying areas that will meet either the fossil fuel employment threshold [PDF] or qualify as energy communities in 2023 [PDF] due to meeting the fossil fuel employment threshold and the unemployment rate requirement as of 2022. Energy community frequently asked questions were also updated on the IRS site to formalize these changes. Access the notice here [PDF] . Updated answers to FAQ topics are found here . |
| IR-2024-61 |
March 5, 2024 |
Final regulations released around tax credits with elective payment options for applicable entities and guidance around transferring tax credits. Elective pay frequently asked questions were also updated on the IRS site to formalize these changes. Access the final regulations here Notable updates to FAQ guidance includes topics such as determining an entity’s tax year, eligibility for filing for extensions, and that payments will typically be issued to entities within 45 days of the due date of their annual return, though in some cases this may take more or less time. The White House and Treasury also released a webinar discussing the final rules for elective pay, which can be found here |
| Exempt Organizations Update |
February 26, 2024 | IRS is holding office hours to help with pre-filing registration process for elective payment and transfer of clean energy credits. Office hours are being held weekly on Wednesdays from 1:00-2:30 pm EST between February 28 and April 24, 2024. Registration is required, and each week’s office hours has a separate registration link, all of which can be found here . |
| IR-2023-252 | December 28, 2023 | Additional guidance released on domestic content exemptions for projects beginning construction prior to January 1, 2025 and a request to provide comments for forthcoming proposed regulations on phaseouts for elective payment and domestic content exemptions. Access the IRS notice here . |
| IR-2023-249 | December 22, 2023 | Release of free pre-filing registration tool for elective payments and a corresponding user guide. Recommendation to submit pre-filing registration at least 120 days prior to filing the tax return to claiming elective pay. Access the user guide here . |