The Revamped Section 48C Advanced Energy Project Credit: Concept Papers Due Soon!
The Section 48C Advanced Energy Project Credit, originally conceived as part of the 2009 Recovery Act, has been revitalized, thanks to the IRA’s addition of $10 billion in new funding and the extension of eligible activities. Key resources for understanding this credit and how to apply for it are IRS Notices 2023-44 and 2023-18.
The rejuvenated Section 48C program involves at least $4 billion going towards 48C(e) Energy Community Census Tracts. Additionally, a sizeable chunk of $1.6 billion is designated for projects based in energy community census tracts, as stated in Section 48C(e).
Eligible projects under this program fall into three categories: Clean Energy Manufacturing and Recycling, Critical Materials, and a third category comprising of projects that re-equip any industrial or manufacturing facility with equipment designed to reduce their greenhouse gas emissions by 20% or more. This includes low or zero-carbon process heat systems, carbon capture, transport, utilization and storage systems, energy efficiency and reduction of waste from industrial processes, and other technologies as determined by the Secretary of the Treasury, under 2023-18, Appendix A.
Applicants interested in this program must first submit a concept paper, clearly indicating the advanced energy project category their project aligns with. Only upon submission of a concept paper can a full application be made. The deadline for concept paper submission is July 31, 2023, while the 48Ce application submission window extends from Fall 2023 through Winter 2023/2024. Applicants can expect to receive IRS allocation decision notifications by March 31, 2024.
Four key priorities guide the 48C credit program: commercial viability, impact on greenhouse gas emissions, strengthening U.S. supply chains and domestic manufacturing for a net-zero economy, and workforce and community engagement. In the case of a “Clean Energy Manufacturing and Recycling” concept paper, these priorities become the evaluation criteria, with emphasis on project schedule, strength of business and management plans, potential for reducing or avoiding greenhouse gases, and the number of jobs created.
The first round of this program prioritizes projects in areas like clean hydrogen, the electric grid, electric heat pumps, electric vehicles, nuclear energy, solar energy, sustainable aviation fuels, and wind energy.
Before applying, all applicants need to register an account on the 48C eXCHANGE portal, with registration and submission functionalities available from June 30. If an applicant receives a denial letter, they can request a debriefing meeting with the DOE to clarify the reasons for their application’s rejection. It’s worth noting that even discouraged applicants may still submit an application if they choose to do so.