Article
Navigate tech-neutral credits for clean energy investments under final rule
Feb. 11, 2025 · Authored by Gabriel Sermeno, Craig Lammlin, Adam DeZego, Kalyn Chacon
With the release of final regulations (TD 10024, RIN 1545-BR17) by the Treasury and IRS, taxpayers taking advantage of tech-neutral production and investment tax credits have more certainty surrounding their eligibility for and use of these credits.
Background
As part of the Inflation Reduction Act of 2022, the Section 45Y Clean Electricity Production Credit (PTC) and the Section 48E Clean Electricity Investment Credit (ITC), commonly called the tech-neutral credits, were enacted. The Section 45Y PTC and Section 48E ITC are available for electricity produced at a facility for which the greenhouse gas (GHG) emissions rate is zero or less.
Taxpayers have been awaiting detailed regulations for these new tech-neutral credits. Proposed regulations were published in June 2024 and final regulations have now been released, providing more certainty and clarity around the requirements for clean electricity technologies to qualify for the credits.
What changes with the final regulations
The final rules largely adopt the proposed regulations without substantive change, including but not limited to the placed-in-service rules, the definition of qualified property, the 80/20 rule for existing facilities, and ownership requirements.
Notably, one of the items that stayed the same in the final version was the short list of facility categories that may be treated as having an emissions rate of not greater than zero, which includes: solar, wind, hydropower, marine and hydrokinetic, geothermal, nuclear fission, fusion energy, and certain waste energy recovery property.
There were, however, some modifications and additional details provided based on the comments received on the proposed regulations. While a full list of changes is out of scope for this alert, below are a few highlights.
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