Today: March 02, 2024
Today: March 02, 2024

US Treasury swamped by demand for bonus wind, solar tax credits in low-income areas

Share This
US Treasury swamped by demand for bonus wind, solar tax credits in low-income areas
David Lawder
December 04, 2023

By David Lawder

WASHINGTON (Reuters) - The U.S. Treasury on Monday said it has been overwhelmed by applications for bonus clean energy tax credits in low-income communities, with officials estimating the energy generated by the proposed wind and solar projects would surpass this year's targeted allocation by more than four times.


Clean energy tax credits in President Joe Biden's 2022 Inflation Reduction Act were designed to offer a 10-20% bonus on top of the base 30% investment tax credit if projects are located in low-income communities, on Native American land or part of affordable housing projects. The aim was to drive investment to economically disadvantaged that have long suffered from job loss.

Data released on Monday shows robust demand for the extra tax credit, on projects estimated to be worth billions of dollars. With demand exceeding available capacity, Treasury will prioritize those with ownership by non-profits, local or tribal governments, or worker cooperatives, in addition to location criteria, a Treasury spokesperson said. The spokesperson added a lottery system may also be used for allocations meeting similar criteria.


During the initial 30-day application window, the IRA's Low-Income Communities Bonus Credit Program received more than 46,000 applications for new wind and solar projects, representing more than 8 gigawatts of proposed capacity. The 2023 allocation for the program is only 1.8 gigawatts.

Clean energy developers will still get the base 30% tax credit for these projects if they proceed this year. They also may be able to wait for the 2024 program to open, for another 1.8 gigawatts of capacity.


"One of the goals of President Biden’s Inflation Reduction Act is to ensure all Americans benefit from the growth of the clean energy economy," Deputy Treasury Secretary Wally Adeyemo said in a statement. "Sky-high demand for this new program shows that communities that have long been held back by lack of investment will see significant benefits from these resources."


The program is available across four categories of qualified wind or solar facilities with a maximum output of less than five megawatts.

The Internal Revenue Service has announced its intention to allocate up to 700 megawatts of capacity in low-income communities; 200 megawatts to Indian lands, 200 megawatts for federally subsidized residential buildings; and 700 megawatts for projects where half the financial benefits go to low-income households.

The IRS may choose to reallocate some 2023 program capacity between categories, the Treasury said.

(Reporting by David Lawder; Editing by Aurora Ellis)


How clean is the dirt on Hunter Biden? A key Republican source is charged with lying to the FBI

An FBI informant who was once held up by Republicans as a credible source of information about Hunter Biden now finds himself charged with lying to federal authorities

Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation

The royal house of Norway says King Harald has been implanted with a temporary pacemaker at a hospital in Malaysia’s resort island of Langkawi

No twerking. No drinking. No smoking. But it's still a party at this Christian nightclub

The Cove is a pop-up, 18-and-up Christian nightclub in Nashville, Tennessee

Where will you be for the April 8 total solar eclipse? There's still time to grab a spot

There are just a few weeks left to pick your spot to see the total solar eclipse on April 8 in North America

At least 10 Palestinians killed by Israeli airstrike in Rafah, health ministry says

CAIRO (Reuters) - At least 10 Palestinians were killed by an Israeli airstrike on Saturday that hit a tent in Rafah, the Gaza health ministry said.

Firefighters face difficult weather conditions as they battle the largest wildfire in Texas history

Firefighters battling the largest wildfire in Texas history face increasingly difficult weather conditions


A party like no other? Asia's richest man celebrates son's prenuptials with a star-studded bash

Tycoons from around the world, heads of state, as well as Hollywood and Bollywood stars have descended on the small western Indian city of Jamnagar where billionaire industrialist Mukesh Ambani is kickstarting a big fat wedding celebration for his youngest son

Alaska's Iditarod dogs get neon visibility harnesses after 5 were fatally hit while training

The Iditarod, the annual sled dog race celebrating Alaska’s official state sport, is set to get underway Saturday with a new focus on safety after five dogs died and eight were injured in collisions with snowmobiles while training

Analysis-High US rates, rising shares a tailwind for convertible bonds

By Shankar Ramakrishnan (Reuters) - Last week, artificial intelligence server maker Super Micro Computer achieved something not seen since 2021: It paid 0% interest rate on a $1.7 billion capital

Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service

The latest rail layoffs this week, combined with an investment fund's ongoing campaign for control of Norfolk Southern, are renewing concerns among unions and regulators about all the cuts hurting safety and service

- Advertisement -
Advertisement: Limited Time Offer