Home      Login

Abstract: 

The Inflation Reduction Act has provided a massive boost in energy investments over the last two years, but the true transformation in energy tax policy is still coming. The existing production and investment tax credits are scheduled to change dramatically for projects that begin construction after this year. Gone will be the old versions of Code Sections 45 and 48, which picked winners and losers by prescribing specific categories of property that qualified. Under new Sections 48E and 45Y, any technology meeting new “technology neutral” standards can potentially benefit. But there will still be winners and losers depending on how the IRS interprets the rules. Newly proposed regulations finally give us some insight into what will qualify, but leave some major questions unanswered. The authors explore key aspects of the rules.

Keywords: Inflation Reduction Act; production tax credit; investment tax credit; IRC Sec. 45; IRC Sec. 48; IRC Sec. 45Y; IRC Sec. 48E; sale or transfer of credits; greenhouse gas emissions; qualifying property

Affiliations:  1: Grant Thornton Advisors LLC; 2: Grant Thornton.