Promoting clean and green energy is the right way to go ahead in these testing times and to help out with this noble cause a new 10 billion dollar program is all set to be rolled out by the Treasury Department for Energy Subsidies. Not only this but in low-income communities, new tax breaks will be put on solar and wind projects in a complementing move.
While we call the program new, the foundations for it were laid last year under climate, health, and tax law which is commonly referred to as the Inflation Reduction Act. While the companies get down to business and grab the newly planned incentives to help make the shift from fossil fuels to cleaner fuels, on the other side you have decision-makers deciding how these tax breaks need to be applied.
It was recently announced and as reported by WSJ, a new 10 Billion Dollar program is all set to be rolled out by the Treasury Department for Energy Subsidies and the first round of taking applications by the Treasury Department will take place on May 31. The applications will be considered only for 4 billion dollars out of the total 10.
These companies will stand to get a 30% investment tax credit. However, to be able to avail of this benefit the companies would need to be in the business of manufacturing fuel-cell components, processing critical minerals, or adding carbon-capture equipment to existing facilities.
The decline of coal led to the shutting of coal mines and coal-fired power plants and so 1.6 billion dollars of the initial 4 billion dollars will be reserved for places affected by it. However, to qualify for this reservation a coal mine needs to have been shut since 1999 and in the case of a coal power plant needs to have been retired after 2009, or at least the occurrence, in either case, needs to be adjacent to such Census tracts.
Usually meeting specified criteria helps you qualify for federal subsidies, however, under the advance energy program not only are the taxes capped but also they will be awarded through the application. Treasury and Energy departments will be responsible for going through the applications and inspecting them carefully before rewarding companies with the benefits.
Companies that already receive some kind of tax benefit won’t be able to claim this one in addition to it. Treasury officials aren’t sure themselves yet as to what projects might go ahead and get picked for this program. There is a chance that the administration might try to give the tax benefits of this program to companies who don’t qualify for money from other Energy department programs that are in place.
However, the separate program for wind and solar projects tax benefits which will be launched in low-income communities will see its applications open up later this year and the credits provided by it will be eligible to be used on top of other incentives that a company might already be getting.
Community-based organizations will get priority while new entrants in markets will be encouraged as the benefit is especially for people from areas with high poverty rates, low-income residential projects, tribal land, and places where people with low income will benefit.