Finance Ministry Finalizes Rules to Encourage Clean Energy Investment in Low-Income Areas By Investing.com
Investing.com — The US Treasury Department and the IRS have released final rules and procedural guidance for the Section 48E(h) Clean Low Income Communities Bonus Loan Program. This program is an expansion of the initial 48(e) bonus credit, aimed at reducing home energy costs and promoting clean energy investments in low-income communities, Indian lands and affordable housing.
The first year of the 48(e) program received more than 54,000 applications from 48 states, the District of Columbia, and 4 territories, generating an estimated $3.5 billion in investment in low-income communities and Native American lands. It is expected to offset energy costs by $270 million annually. In its second year, the program received more than 57,000 applications for more than 1.9 gigawatts of clean energy generation, with approved applications expected to generate approximately $4 billion in investment and nearly $350 million in annual energy savings.
The new rules expand the list of eligible technologies beyond wind and solar to include zero-emission technologies like hydropower and geothermal. The credit awarded offers an increase of 10 or 20 percentage points on top of the 30 percent 48E investment tax credit, provided the prevailing wage and apprenticeship requirements are met.
U.S. Deputy Treasury Secretary Wally Adeyemo said the expansion of the Low-Income Community Bonus Credit for clean electricity will help reduce energy costs in often overlooked communities and allow developers to work with those communities to provide customized energy and economic solutions.
The 48E(h) program plans to award bonuses for 1.8 gigawatts of clean electricity generation to low-income communities each year from 2025 through at least 2032. The application period for the 2025 program year will open on January 16, 2025, and end on 1 August 2025. For the program year 2026 and the following years, the application period will open on the first Monday of February and close on the first Friday of August.
The final rules include key changes from the 48(e) program, such as transitioning to a 48E clean electricity investment credit and incorporating public feedback and lessons learned from previous program years. The changes include expanding the eligibility of investment technologies and performance for low-income households and creating opportunities for small businesses. The final rules also provide a pathway for new clean energy companies to gain priority in applying to the program.
The Ministry of Finance guidelines also outline the annual capacity limit available for allocation, divided into four categories of facilities. For each program year, the annual capacity limit of 1.8 gigawatts will be allocated accordingly.
This article was generated with the help of AI and reviewed by an editor. See our T&C for more information.
