Incentives and Compliance with Energy Provisions of the Inflation Reduction Act (IRA)
The Inflation Reduction Act (IRA) provides unprecedented opportunities, benefits, and financial incentives over 10 years–through 2033 (and beyond)–for clean energy generation, manufacturing of renewable energy equipment, electric vehicle infrastructure, purchasing tax credits, energy efficiency, and more. The IRA accelerates decarbonization across new technologies and provides individuals and companies new tax credits aimed at clean energy generation, distribution, and use.
Clark Hill attorneys have substantial experience and advise clients on:
- Tax equity financings, project finance, and partnership/joint venture transactions for solar, wind, and battery energy projects.
- Purchases of tax credits: for those seeking to purchase tax credits.
- Bonus tax credits for domestic content equipment, Energy Communities, low-to-moderate income communities, and historically polluted areas.
- New tax credits for manufacturing renewable energy equipment in the United States.
- New “domestic content” manufacturing rules under IRA for supply chain and equipment.
- Electric vehicle and EV manufacturing.
The IRA has adopted a new framework for new participants and institutions namely:
- Direct Pay & IRS refunds: in the past nonprofits, churches, schools, universities, etc. typically could not monetize tax credits. Now the IRA offers “Direct Pay” to nonprofit entities, which acts as a direct refund from the IRS. Clark Hill can assist nonprofit clients in obtaining a Direct Pay refund from the Internal Revenue Service for clean energy projects.
- Transferability of tax credits: developers can transfer tax credits one-time to those seeking to purchase tax credits. Clark Hill can assist in structuring and drafting these transactions (without having to use partnership model and avoiding long-term asset management or ownership issues).
For a detailed description and analysis of the IRA’s extensive benefits and clean energy provisions, please see our alerts below.