WASHINGTON, D.C. — The Department of Treasury, Internal Revenue Service (IRS), and Department of Energy (DOE) have announced the opening of the application portal for the 2024 Low-Income Communities Bonus Credit Program. This initiative aims to drive clean energy investments in underserved areas by providing significant tax incentives.
Applications will be accepted until 11:59 p.m. ET on June 27. All applications submitted during this window will be considered as arriving simultaneously. After this initial period, applications will be reviewed on a rolling basis.
More information can be found on the Inflation Reduction Act of 2022 page on IRS.gov.
Boosting Renewable Energy: Tax Incentives and Community Empowerment
The program, established under the Inflation Reduction Act, offers a 10 or 20 percentage point increase to the energy investment tax credit for solar and wind facilities under five megawatts (AC). To qualify, projects must receive an allocation of environmental justice solar and wind capacity limitation and be placed in service within the specified year.
The Low-Income Communities Bonus Credit Program supports the Biden-Harris Administration’s Investing in America agenda. This initiative aims to create jobs, reduce costs for American families, and spur economic revitalization in historically neglected communities.
The Department of Energy’s Office of Energy Justice and Equity administers the program in collaboration with the IRS and the Department of Treasury. The program prioritizes increasing access to renewable energy in underserved communities, encouraging new market participants, and providing substantial benefits to economically and environmentally marginalized groups.
Director of DOE’s Office of Energy Justice and Equity emphasized the importance of the program. “By targeting low-income and underserved communities, we aim to bridge the gap in renewable energy adoption and create equitable economic opportunities.”
The bonus credit provides a 10 or 20 percentage point boost to the investment tax credit for eligible solar and wind facilities with a net output of less than five megawatts. A 10-percentage point increase applies to facilities in low-income communities or on Indian land, while a 20-percentage point increase is available to facilities that are part of a qualified low-income residential building or economic benefit project.
For 2024, at least 50% of the capacity in each category will be reserved for projects meeting specific ownership and geographic criteria as outlined in the Final Regulations and Revenue Procedure.
Empowering Communities: Transformative Clean Energy Initiative for Economic Equity
This program has significant implications. For one, it promotes renewable energy adoption in low-income areas, reducing electricity costs for residents and contributing to cleaner air and water. By prioritizing these communities, the initiative addresses long-standing economic and environmental inequities.
Encouraging new market participants can lead to innovation and competition, driving down costs and improving efficiency in the renewable energy sector. This approach creates jobs and fosters economic growth in areas that need it most.
Moreover, reducing reliance on fossil fuels helps combat climate change, a critical issue that disproportionately affects low-income and marginalized communities. By investing in sustainable energy, the program contributes to a healthier environment and a more resilient energy grid.
In summary, the 2024 Low-Income Communities Bonus Credit Program represents a strategic investment in clean energy and economic justice. By offering substantial tax incentives, the program aims to accelerate renewable energy projects in underserved areas, driving economic growth and environmental benefits. As the application process unfolds, the potential for transformative change in these communities becomes increasingly evident.
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