Here's the full list of tax credits and other incentives that are a part of the IRA:

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CLEAN ENERGY TAX CREDITS: PRODUCTION TAX CREDITS

Clean Hydrogen Production Tax Credit
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• ‍About: Transferable tax credit for the production of clean hydrogen at a qualified clean hydrogen production facility
• Project Type: Energy Developers‍
• Rate: The base credit is $0.60/kg (adjusted for inflation) multiplied by the applicable percentage (20% to 100% depending on lifecycle greenhouse gas emissions):*20% credit for emission rate of 2.5-4kg of C02e per kg H2*25% credit for emission rate of 1.5-25kg of C02e per kg H2*33.4% credit for emission rate of 0.45-1.5kg C02e per kg H2*100% credit for emission rate of below 0.45kg C02e per kg H2‍
• Term / Timing: For hydrogen produced after 12/31/22 (for facilities placed in service before 1/1/33 for their first 10 years in service)‍
• Energy Community Bonus (10%): NO‍
• Domestic Bonus (10%) /Domestic Requirement: NO‍
• Prevailing Wage Enhancement (5x): YES
  

Advanced Manufacturing Production Credit
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• About: Transferable production tax credit for domestic manufacturing of components for solar and wind energy, inverters, battery components, and critical minerals
• Project Type: Domestic Manufacturers
• Rate: Credit varies by technology
• Term / Timing: Credit for critical minerals is permanent starting in 2023. For other items, the full credit is available between 2023-2029 and phases down over 2030-2032
• Energy Community Bonus (10%): NO
• Domestic Bonus (10%) /Domestic Requirement: Only Domestic Manufacturers are eligible; No additional bonus credit
• Prevailing Wage Enhancement (5x): NO
  

Nuclear Power Production Tax Credit
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• About: Transferable tax credit for electricity produced at a qualified nuclear power facility
• Project Type: Nuclear
• Rate: Credit is 0.3 cents/kWh, inflation adjusted
• Term / Timing: Available for electricity produced and sold after 12/31/23, in tax years beginning after that date. Not available for tax years beginning after 12/31/32‍
• Energy Community Bonus (10%): NO‍
• Domestic Bonus (10%) /Domestic Requirement: NO‍
• Prevailing Wage Enhancement (5x): YES
  

Production Tax Credit for Electricity from Renewables
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• About: Transferable tax credit for production of electricity from renewables
• Project Type: Biomass, Geothermal, Hydrokinetic, Hydropower, Landfill and Waste, Marine, Small Irrigation, Solar, Wind
• Rate: Credit is 0.3 cents/kW, inflation adjusted
• Term / Timing: Construction must start before 1/1/25
• Energy Community Bonus (10%): YES
• Domestic Bonus (10%) /Domestic Requirement: YES
• Prevailing Wage Enhancement (5x): YES
  

Clean Electricity Production Tax Credit
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• About: Transferable technology-neutral tax credit for production of clean electricity. Replaces the production tax credit for electricity generated from renewable sources
• Project Type: Zero GHG Electricity Generators
• Rate: Credit is 0.3 cents/kW, inflation adjusted
• Term / Timing: Facilities placed in service after 12/31/24. Phase-out starts the later of (a) 2032 or (b) when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower
• Energy Community Bonus (10%): YES
• Domestic Bonus (10%) /Domestic Requirement: YES
• Prevailing Wage Enhancement (5x): YES

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CLEAN ENERGY TAX CREDITS: INVESTMENT TAX CREDITS

Energy Investment Tax Credit
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• About: Additional transferable investment tax credit for small-scale solar and wind facilities in low-income communities.  Allocated investment credit, capped at 1.8 GW per year (unused capacity carries over to following year); for solar and wind facilities with a maximum net output of less than 5 MW, including associated energy storage technology
• Project Type: Wind & Solar‍
• Rate: Credit is 6% of qualified investment
• Term / Timing: The Low-Income Communities Bonus Credit begins in 2023 and is available through 2032 or the year annual GHG emissions from electricity production in the U.S. are equal to or less than 25% of 2022 levels, whichever is later. The bonus requires an application by the taxpayer, with a cumulative total of 1.8 GW of direct current capacity per year available for allocation
• Energy Community Bonus (10%): YES
• Domestic Bonus (10%) /Domestic Requirement: YES
• Prevailing Wage Enhancement (5x): YES
  

Clean Electricity Investment Tax Credit
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• About: Technology-neutral transferable tax credit for investment in facilities that generate clean electricity. Replaces the investment tax credit for facilities generating electricity from renewable sources (extended in Section 13102 through 2024)
• Project Type: Energy Storage, Zero GHG Electricity Generators
• Rate: Credit is 6% of qualified investment
• Term / Timing: For facilities placed in service after 12/31/24. Phase-out starts the later of (a) 2032 or (b) when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower
• Energy Community Bonus (10%): NO
• Domestic Bonus (10%) /Domestic Requirement: Only Domestic Manufacturers are eligible; No additional bonus credit
• Prevailing Wage Enhancement (5x): NO
  

Advanced Energy Project Credit
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• About: Provides a transferable tax credit for investments in advanced energy projects that (1) re-equips, expands, or establishes an industrial or manufacturing facility for the production or recycling of a range of clean energy equipment and vehicles; (2) re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent; or (3) re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials
• Project Type: Critical Minerals, Industrial Facility, Manufacturing Facility, Manufacturing Retrofit
• Rate: Credit is 6% of qualified investment
• Term / Timing: Competitive application process beginning on 5/31/23;  DOE will consider greatest job creation, greatest reduction in greenhouse gas emissions, shortest time to completion, greatest potential for innovation, geographic diversity, commercial viability and regional economic development potential when awarding credits
• Energy Community Bonus (10%): NO
• Domestic Bonus (10%) /Domestic Requirement: NO
• Prevailing Wage Enhancement (5x): YES

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CLEAN VEHICLE TAX CREDITS

Credit for Qualified Commercial Clean Vehicles
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• About: Non-transferable tax credit for purchasers of qualified commercial clean vehicles businesses that acquire motor vehicles or mobile machinery for use or lease; tax-exempt entities that acquire them for use
• Project Type: Commercial Vehicle Consumers‍
• Rate: The amount of the credit is the lesser of (a) 15% of the vehicles basis (i.e. its cost to the purchaser) or 30% for vehicles without internal combustion engines, or (b) the amount the purchase price exceeds the price of a comparable internal combustion vehicle. The credit is capped at $7,500 for vehicles < 14,000 lbs and $40,000 for all other clean vehicles
• Term / Timing: Vehicles placed in service after 1/1/23 and acquired before 1/1/33
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): N/A

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FUEL TAX CREDITS

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Alternative Fuel Vehicle Refueling Property Credit
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• About: Tax credit (transferable in some cases) for alternative fuel vehicle refueling and charging property in low-income or non-urban areas. Alternative fuels include electricity, ethanol, natural gas, hydrogen, biodiesel, and others. The qualified alternative fuel vehicle refueling property must be for clean-burning fuels, as defined in the statute, and must be located in low-income or rural areas
• Project Type: AFV Refueling Property
• Rate: 6% of the cost for businesses, limited to a $100,000 credit per item of property for businesses
• Term / Timing: January 1, 2023-December 31, 2032
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): Businesses can claim a 30% credit for projects meeting prevailing wage and registered apprenticeship requirements, limited to a $100,000 credit per item of property for businesses.
  

Tax Credits for Biodiesel and Renewable Diesel
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• About: Non-transferable tax credits for biodiesel and renewable diesel. Producers of biodiesel, biodiesel mixtures, and renewable diesel
• Project Type: Clean Fuel Producers
• Rate: $1.00 per gallon for biodiesel, biodiesel mixtures, and renewable diesel. Additional $0.10 credit for small Agri-diesel producers. In addition, there is a $1.00-per-gallonexcise tax credit for biodiesel and renewable diesel mixtures
• Term / Timing: Through 12/31/24
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): N/A

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Tax Credit for Alternative Fuels
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• About: Non-transferable tax credits for alternative fuels. (If specific requirements are met, excess credit under § 6426(d) may be made as a payment under § 6427(e))
• Project Type: Clean Fuel Producers
• Rate: $0.50 per gallon for alternative fuels and alternative fuel mixtures
• Term / Timing: Through 12/31/24
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): N/A

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Second-Generation Biofuel Incentives
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• About: Non-transferable income tax credit for second-generation biofuel production. Must be registered producers of second-generation biofuels
• Project Type: Clean Fuel Producers
• Rate: $1.01 per gallon
• Term / Timing: Through 12/31/24
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): N/A

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Clean Fuel Production Credit
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• About: Transferable tax credit for domestic production of clean transportation fuels, including sustainable aviation fuels.  Fuels with less than 50 kilograms of carbon dioxide equivalent per million British thermal units (CO2e per MMBtu)qualify as clean fuels eligible for credits
• Project Type: Clean Fuel Producers
• Rate: The base amount is $0.20/gallon for non-aviation fuel and $0.35/gallon for aviation fuel, multiplied by the carbon dioxide “emissions factor” of the fuel (defined as the quotient of 50 kg CO2e/MMBtu minus the emission rate factor of the fuel divided by 50 kg CO2e/MMBtu). Inflation adjusted after 2024
• Term / Timing: Fuel produced after 12/31/24 and used or sold before 12/31/27
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: Registered producers in the United States; no bonus credit
• Prevailing Wage Enhancement (5x): Credit is 5 times the base amount ($1/gallon for non-aviation fuel, $1.75gallon for aviation fuel, multiplied by the emissions factor) for facilities meeting prevailing wage and registered apprenticeship requirements. Inflation adjusted after 2024.

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Sustainable Aviation Fuel Credit
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• About: Non-transferable credit for the sale or use of sustainable aviation fuel (SAF) that achieves a lifecycle greenhouse gas emissions reduction of at least 50% as compared with petroleum-based jet fuel; 1/1/23-12/31/24; producers and blenders of SAF-kerosene fuel mixtures for aviation
• Project Type: Aviation, Clean Fuel Producers
• Rate: $1.25/gallon of SAF; bonus up to $0.50/gallon depending on lifecycle greenhouse gas emissions of SAF relative to petroleum-based jet fuel
• Term / Timing: January 1, 2023-December 31, 2024
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: Qualified SAF mixture must be made in the U.S. and fueling of the aircraft must occur in the U.S; no bonus credit
• Prevailing Wage Enhancement (5x): N/A

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CARBON MANAGEMENT

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Credit for Carbon Oxide Sequestration
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• About: Transferable tax credit for carbon dioxide sequestration coupled with permitted end uses within the United States. U.S. facilities within minimum volumes: 1,000 metric tons of CO2 per year for DAC facilities; 18,750 metric tons for electricity generating facilities (with carbon capture capacity of 75% of baseline CO2 production); 12,500 metric tons for other facilities
• Project Type: C02 Emitting Facilities
• Rate: $17/metric ton of carbon dioxide captured and sequestered; $12/metric ton for carbon dioxide that is injected for enhanced oil recovery or utilized; $36 and $26, respectively, for direct air capture facilities
• Term / Timing: Credit can be claimed for 12 years after a facility is placed in service. Facilities must be placed in service before 1/1/33
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): YES

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Energy Efficient Commercial Buildings Deduction
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• About: Tax deduction for energy efficiency improvements to commercial buildings, such as improvements to interior lighting; heating, cooling, ventilation, and hot water; and building envelope. Owners and long-term lessees of commercial buildings. Designers of energy efficient building property (architects, engineers). Tax-exempt owners of commercial properties, pending Treasury guidance on deduction allocation
• Project Type: Building Designers, Commercial Property Owners
• Rate: $0.50-$1 per square foot, depending on increase in efficiency, with deduction over four year periods capped at $1 per square foot. Taxpayers can alternatively deduct adjusted basis in “qualified retrofit plans” that reduce a buildings energy use intensity by at least 25%
• Term / Timing: Permanent; new rules generally begin in 2023
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): YES

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Cost Recovery for Qualified Facilities, Qualified Property, and Energy Storage Technology
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• About: Additional tax deduction for facilities or property qualifying for Section 45Y tax credit.
• Project Type: Carbon Free Energy Production
• Rate: This allows qualified facilities, properties, and energy storage technology to have a recovery period of 5 years
• Term / Timing: Effective on 1/1/2025
• Energy Community Bonus (10%): N/A
• Domestic Bonus (10%) /Domestic Requirement: N/A
• Prevailing Wage Enhancement (5x): N/A

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Questions about the Inflation Reduction Act and its effect on site selection and beyond?

Contact the BLS & Co. team members below.

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