The US government has unveiled plans to broaden the scope of tax credits for clean energy technologies.
The move extends the incentives previously focused on solar and wind energy to encompass additional clean energy sources.
The US Treasury Department has released guidance for the clean electricity production credits and clean electricity investment credits, as established by the 2022 Inflation Reduction Act (IRA).
These credits will become accessible in 2025 when the previously offered tax incentives for solar and wind energy production and investments expire.
The newly proposed tax credits will include technologies such as marine and hydrokinetic energy, nuclear fission and fusion, hydropower, geothermal and certain types of waste energy recovery.
Further details have been provided on how energy storage technologies can qualify for the clean electricity investment credit.
The statute mandates that clean energy technologies utilising combustion or gasification for electricity generation must perform a lifecycle greenhouse gas analysis to verify net-zero emissions.
These tax credits are designed to foster the development of new zero greenhouse gas emissions technologies and offer long-term stability and certainty for investors and developers in the clean energy sector.
Previously, the credits could reach up to 30% for wind and solar projects, contingent upon meeting specified criteria.
John Podesta, senior advisor to the US President on international climate policy, stated: “The Inflation Reduction Act’s new technology-neutral clean electricity credits, which will come into effect in 2025, are one of the law’s most significant contributions to tackling the climate crisis.
“Today’s initial guidance from the Treasury will help provide long-term certainty to investors and developers, support new zero-emission innovations, and accelerate our progress toward a 100% clean power sector.”
US Treasury Secretary Janet L Yellen stated: “President Biden’s Inflation Reduction Act has driven an investment boom that is adding historic levels of new clean power to the grid while keeping consumer energy costs in check, reducing greenhouse gas emissions, and bolstering energy security.
“The clean electricity tax credits created under the Inflation Reduction Act provide certainty to the market and are poised to drive substantial further growth and lower utility bills over the long run.”
