Tax professionals and renewable-energy groups are awaiting guidance from the U.S. Treasury Department about a provision in a new federal law that provides increased tax credits to solar and wind facilities in low-income communities, McGuireWoods San Francisco associate Marc Nickel told Bloomberg Law in a Feb. 6, 2023, story.
The Inflation Reduction Act created investment tax credits that will be available to certain energy projects that receive an “environmental justice solar and wind capacity limitation” from the Treasury Department. The tax credit is intended to bring renewable energy to populations that lack access to it.
Before joining McGuireWoods’ Tax & Employee Benefits Department, Nickel held in-house roles at a large public utility and a publicly traded residential solar company. He told Bloomberg Law that tax professionals and companies interested in receiving the credit are keen to review the procedures for the program, which the Treasury Department must establish by Feb. 12, 2023.
“People are really eager to see it,” Nickel said. “I am curious to see how fully-formed it will be when they release it.”
Nickel said that the law’s annual capacity limit of 1.8 gigawatts is enough to power thousands of residential solar projects, so the cap may not be reached in the credit’s early years but could be hit eventually.