New Clean Energy Tax Credit Incentives
The Inflation Reduction Act was recently passed in August 2022. The act made a multitude of tax credits available, particularly to individuals and homeowners who utilize clean energy technologies. Additionally, there are credits of a similar nature for businesses and industry.
Energy Credits for Businesses
Existing renewable energy credits for businesses that produce electricity from renewable sources have been extended through 2024. Energy credits have been increased for renewable facilities that are connected to low-income areas. Several existing alternative fuel credits have also gotten an extension through 2024; these include biodiesels and hydrogen. A new credit for the production of clean hydrogen will take effect December 31, 2022. There’s even a new credit for sustainable aviation fuel!
There’s a new advanced manufacturing production credit for U.S. production of photovoltaic cells and for wind and solar properties. Qualified facilities (including certain expansions) that produce clean electricity can qualify for a new credit provided the facility goes into service after December 31, 2024 and does not generate greenhouse gas emissions.
There are new tax credits available for both personal and commercial use vehicles. For personal vehicles, the credits are largely based on an individual’s income and the MSRP of the vehicle. As for commercial vehicles, the credits are incremental. The tax credits for qualified commercial clean vehicles equal 15% of the cost of the vehicle and 30% for vehicles with no gasoline or diesel engines. The credit is good up to $7,500 for a vehicle with a gross weight under 14,000 lbs. and up to $40,000 for all other vehicles.
Alternative vehicle refueling property credits for business owners who provide or dispense alternative fuels for vehicles, as defined by the IRS, have been extended through 2032 and modified so the maximum credit is changed from $30,000 to $100,000. These changes are effective for properties in service after December 31, 2022.
Walden’s environmental professionals are experienced in providing clean energy engineering and consulting services. You can read more about our research and development efforts relating to renewable energy here. If you are looking to learn more about the benefits of cleaner energy, please contact Walden Environmental Engineering at 516-588-6859.