Renewal of $10 Billion Tax Incentive for Clean-Energy Producers by Biden Administration
Under the Biden administration, $10 billion from the Inflation Reduction Act is being used to revitalise a tax credit for producers of solar panels, wind turbines, fuel cells, and other clean energy items.
Beginning at the end of May, the Treasury Department declared that clean energy enterprises that expand national production, diminish industrial greenhouse gas emissions, or facilitate in constructing a domestic supply chain for essential minerals are eligible to apply for the "advanced energy" tax credit.
The Department of Energy announced that a 30% tax credit is being granted for certain green technologies, such as carbon capture systems, grid modernization initiatives, clean hydrogen production, electric or fuel cell autos, and equipment that reduces industrial emissions. The initial allotment of $4 billion contains $1.6 billion for projects in regions where coal mines and coal-fired power plants have closed.
The Qualifying Advanced Energy Project Credit was initially established in the American Recovery and Reinvestment Act of 2009, which granted $2.3 billion. Unfortunately, the program quickly ran out of funds and efforts to replenish it were unsuccessful in Congress until it was included in the much-discussed climate bill of last year, which supplied $370 billion for climate action.
The Treasury Department declared the initiation of an Inflation Reduction Act initiative, which could potentially offer an extra 20% tax credit to wind and solar projects situated in impoverished neighborhoods, potentially raising the incentive to 50% of the project's total cost.