The Inflation Reduction Act of 2022 provides for, among many other credits, up to $10 billion in investment tax credits to be allocated to qualifying advanced energy projects, which include projects that re-equip, expand, or establish facilities for the production or recycling of clean energy equipment or vehicles or for the processing, refining or recycling of critical minerals, or that re-equip a facility with equipment designed to reduce greenhouse gas emissions by at least 20%.
Taxpayers must complete an application process involving the Department of Energy and the Internal Revenue Service in order to claim the credit. The IRS issued its first guidance on implementing the Advanced Energy Projects Credit program on February 13, 2023. This memo outlines key considerations for manufacturers, industrial companies, project developers and potential project investors and tax credit purchasers.