DOE awards $1.9B to 35 projects for advanced energy project tax credit
Thirty-five projects across 20 states received a total of $1.93 billion in allocations of the Qualifying Advanced Energy Project Credit (48C), according to the U.S. Department of Energy (DOE).
Funded by the Inflation Reduction Act, the 48C credit is an investment tax credit of up to 30 percent of qualified investments for projects that meet prevailing wage and apprenticeship requirements.
It is aimed at accelerating clean energy manufacturing and recycling and reducing greenhouse gas emissions at industrial facilities.
The awarded projects focus on grid components, electric vehicle components and chargers, solar components, clean steel, critical materials processing and recycling, and other clean energy products. Further, seven of the projects are located in traditional energy communities, which include communities with closed coal mines or coal plants.
“The Biden-Harris Administration is executing an industrial strategy that prioritizes rebuilding our domestic manufacturing sector, creating good-paying jobs across the country,” U.S. Secretary of Energy Jennifer Granholm said. “Through the historic Advanced Energy Project Credit, we are leveraging the infrastructure, expertise, and grit of America’s energy communities—where the workers that powered our energy past, will power our energy future.”
On March 29, the Internal Revenue Service (IRS) allocated approximately $4 billion of 48C credits for over 100 projects across 35 states, with approximately $1.5 billion allocated to projects in designated energy communities. As of April 18, 35 projects voluntarily self-disclosed information to DOE to share publicly.
“President Biden’s economic agenda ensures all communities benefit from the growth of the clean energy economy by driving innovation and investment in areas of the country that have long been at the forefront of fossil fuel production,” U.S. Secretary of the Treasury Janet Yellen said. “Investments in advanced energy projects strengthen our energy security and create good-paying jobs in vital fields like clean energy manufacturing and critical materials processing. They also allow for existing energy infrastructure to be upgraded for the clean energy economy.”
Fourteen of these projects will expand the manufacturing of clean energy products and materials. These projects will include new and expanded facilities to produce products ranging from electric vehicle chargers, recycled glass and polysilicon for solar panels, and steel needed for offshore wind projects. Also, eight projects will produce critical grid components needed to bolster grid resiliency and overcome supply chain constraints to upgrading the grid, including large power transformers, grid scale batteries, substation electrical transformers, voltage regulators, and belowground and underwater electrical cables.
In addition, five projects will increase the U.S. production and refinement of critical minerals and materials needed to support the manufacturing of materials like electrical steel, lithium carbonate, and synthetic graphite. Projects will also include facilitating the recycling of lithium-ion batteries and black mass, ensuring critical minerals stay in the country for reuse and long-term supply chain and energy security.
Further, right projects will reduce emissions at existing industrial facilities or accelerate the manufacturing of clean hydrogen and low carbon fuels, including the manufacturing of electrolyzers, to facilitate the decarbonization of essential, energy-intensive sectors like steel and cement.
Treasury and the IRS anticipate issuing guidance for the second round of the 48C program in the coming weeks, with a submission window anticipated to open by this summer.
