The Treasury and IRS have recently released a series of notices and guidelines to outline the qualifications necessary for clean energy credits under various sections of the Internal Revenue Code. These documents aim to provide detailed instructions for both developers and investors. Key releases include:
- Notice 2023-29: This notice elaborates on the criteria for situating clean energy projects within energy communities, specifying requirements for location and eligibility.
- Notice 2023-45: An update to the previous notice, it confirms the applicability of the guidelines to constructions commencing on or after the start of 2023 and elaborates on the brownfield site safe harbor requirements for projects under 5MW in AC, mandating a Phase I Assessment.
- Notice 2023-47: This notice offers appendix lists for taxpayers to determine eligibility under the Statistical Area or Coal Closure Categories, providing a detailed breakdown of the requirements for each.
- FAQs: A compilation of commonly asked questions, offering insights into the classification and qualification of energy communities and brownfield sites.
Highlights of Energy Community Provisions:
Energy communities are classified into three distinct categories: brownfield sites, specified MSAs/non-MSAs based on unemployment rates, and census tracts affected by recent coal mine or coal power plant closures. For these areas, clean energy projects can benefit from an increased credit amount, up to an additional 10% for PTC and ITC.
- Brownfield Site: Defined as potentially contaminated lands, safe harbor status can be achieved through federal assessments or specific ASTM Environmental Site Assessments. Projects under 5MW must complete a Phase I Assessment.
- Statistical Area: These are areas significantly impacted by fossil fuel employment or local tax revenues from fossil fuels, with unemployment rates at or above the national average. Eligibility is determined annually through updated listings.
- Coal Closure: Areas directly adjacent to census tracts affected by post-1999 coal mine closures or post-2009 coal power retirements.
Determining Project Location:
The guidelines clarify how a project is considered located in an energy community, focusing on either the Nameplate Capacity Test or the Footprint Test for different project types.
Conclusion and Assistance:
Professionals like those at FORVIS can provide detailed evaluations and guidance on how your project may qualify for additional benefits under these new regulations, ensuring compliance with specific requirements and safe harbors.”
This revised passage retains the informative and structured nature of the original text, ensuring that readers understand the significance, details, and implications of the U.S. Treasury and IRS documents regarding clean energy credits and energy communities.
Reference – https://www.forvis.com/forsights/2023/07/energy-communities-where-how-to-use-clean-energy-credits
