A transferable tax credit market created by the 2022 Inflation Reduction Act is drawing more investment into solar and other clean energy technologies, from a wider range of investors. Solar developers can access either investment tax credits (ITCs), which are allocated to project costs, or production tax credits (PTCs), which are based on the energy output. Manufacturers gain PTCs on components produced. Tax credits can provide up to 60% of project construction costs because bonus adders are available for meeting wage and apprenticeship standards, minimum domestic content levels and locating projects in communities with low incomes or affected by fossil fuel divestment. The tax credits will be available until at least 2032, offering market participants “greater certainty and stability, facilitating long-term planning,” Hans Royal, Senior Director of Renewable Energy & Carbon Advisory at Schneider Electric, a supplier of energy management and distribution solutions, told Reuters Events.
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