Agency: Department of the Treasury
Description:
Phased tax credit for zero-emission electricity production
Bill Section:
13701
US Code:
26 USC 45Y
New or Existing:
New
Potential Cost:
$11,200,000,000
Timeline:
2025 through phase out beginning in 2032 or the calendar year in which annual GHG emissions from US electricity production are less than 26% of 2022 U.S. electricity sector GHG emissions
Implementation Status/Rulemaking:
On October 5, 2022, the Internal Revenue Service issued Notice 2022-49 to requested comments on a number of energy generation incentives. Comments were due November 4, 2022: Source
On April 4, 2023, the Internal Revenue Service issued Notice 2023-29 which requested comments on what constitutes an energy community under sections 45, 45Y, 48, and 48E. Comments were due May 4, 2023: Source
On May 12, 2023, the Internal Revenue Service issued Notice 2023-38 which provides initial guidance on the domestic content bonus credit under sections 45, 45Y, 48, and 48E: Source
The Internal Revenue Service issued Notice 2023-45 and Notice 2023-47 to provide further guidance on what constitutes an energy community: Source
TCS Notes:
Cost estimate is from FY26-31 (of which $5.2 billion is in FY31). GHG requirements for zero-emission electricity production must be calculated and defined.
Elective Payment and Transferability allowed in certain cases.