Advancing energy security

Sustainability-related C&I law changes in the Inflation Reduction Act

Of the 730 pages of legislative text, nearly 300 pages address clean energy credits and incentives under Title I – Committee on Finance, Subtitle D – Energy Security, which are estimated at $258 billion over a 10-year period according to the Congressional Research Service. Many of the clean energy credits and incentives provisions were modified from prior drafts of the Build Back Better Act under Subtitle F – Green Energy. Some of the highlights in our new report, Advancing energy security: Sustainability-related tax provisions in the Inflation Reduction Act, include:

Enhanced sustainability incentives, including increased credit amounts tied to new requirements

• Renewable energy credits under sections 45 and 48, as well as new credits under sections 45Y and 48E for facilities or property placed in service after 2024
• Carbon capture, hydrogen, and nuclear credits under sections 45Q, 45V, and 45U
• Transportation and fuels credits under sections 6426, 6427, 40A, and 40(b), and new sections 40B and 45Z
• Residential and energy efficiency credits or deductions under sections 25C, 25D, 45L, and 179D
• Manufacturing credits under sections 48C and 45X

New options for utilizing certain tax credits, including provisions for direct pay elections, credit transferability, and a 3-year credit carryback provision