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Program provides a 10 or 20-percentage point tax credit boost for solar and wind projects in low-income or Tribal communities

WASHINGTON —Today, the U.S. Department of the Treasury, U.S. Department of Energy, and Internal Revenue Service (IRS) announced that applications for the Low-Income Communities Bonus Credit program under Section 48(e) of the Internal Revenue Code are now open.

This groundbreaking program through President Biden’s Inflation Reduction Act — the largest climate investment in history — provides a 10 or 20-percentage point boost to the Investment Tax Credit for qualified solar or wind facilities in low-income communities. The goals of the program are to increase access to clean energy in low-income communities, encourage new market participants, and benefit individuals and communities that have experienced adverse health or environmental effects or lacked economic opportunities. This program will advance President Biden’s Investing in America Agenda — a key pillar of Bidenomics — by lowering energy costs and providing breathing room for hard-working families, creating good-paying clean energy jobs in low-income and Tribal communities, and supporting small businesses.

“One of the goals of President Biden’s Investing in America agenda is ensuring all Americans benefit from the growth of the clean energy economy,” said Deputy Secretary of the Treasury Wally Adeyemo. “This new bonus incentive through the Inflation Reduction Act will drive investment to underserved communities to ensure they benefit from lower energy costs and reduced pollution. This program has the potential to drive thousands of new clean energy projects each year, including projects to ensure Americans who rent or live in public housing benefit from lower energy costs.”

As provided in previous guidance, the Low-Income Communities Bonus Credit Program allocates 1.8 gigawatts of capacity available through competitive application for the 2023 program across four categories of qualified solar or wind facilities with maximum output of less than five megawatts. The IRS intends to allocate up to: 700 megawatts to facilities located in low-income communities; 200 megawatts to facilities located on Indian land; 200 megawatts to facilities that are part of federally-subsidized residential buildings, including housing supported by the Low-Income Housing Tax Credit and Section 8 of the Housing Act; and 700 megawatts to facilities where at least 50 percent of the financial benefits of the electricity produced go to households with incomes below 200 percent of the poverty line or below 80 percent of area median gross income.

Depending on the availability of capacity, applications for the 2023 program are expected to be accepted through early next year. The Treasury Department and IRS may choose to reallocate capacity between categories in the event of oversubscription in any category, and unclaimed capacity will roll over into the 2024 program year, when another base 1.8 gigawatts of capacity will be available via application.

For a full list of the Treasury Department’s work to implement the Inflation Reduction Act, see below:

August 16, 2022: Treasury Releases Initial Information on Electric Vehicle Tax Credit Under Newly Enacted Inflation Reduction Act   
  
October 5, 2022: Treasury Seeks Public Input on Implementing the Inflation Reduction Act’s Clean Energy Tax Incentives  
  
FACT SHEET: Treasury, IRS Open Public Comment on Implementing the Inflation Reduction Act’s Clean Energy Tax Incentives   
  
October 26, 2022: READOUT: Stakeholder Roundtable on Clean Power Generation and the Inflation Reduction Act  

October 27, 2022: READOUT: Stakeholder Roundtable on Climate Impact, Equity, and the Inflation Reduction Act   
  
FACT SHEET: Four ways the Inflation Reduction Act’s Tax Incentives Will Support Building an Equitable Clean Energy Economy   
  
October 31, 2022: READOUT: Stakeholder Roundtable on Investor Perspectives on Climate Change, Clean Energy, and the Inflation Reduction Act   
  
November 3, 2022: Treasury Seeks Public Input on Additional Clean Energy Tax Provisions of the Inflation Reduction Act   
  
November 4, 2022: READOUT: Stakeholder Roundtable on Clean Vehicles and the Inflation Reduction Act   
  
November 29, 2022: Treasury Announces Guidance on Inflation Reduction Act’s Strong Labor Protections  
  
December 12, 2022: Treasury and IRS set out procedures for manufacturers, sellers of clean vehicles   
  
December 19, 2022: Treasury, IRS issue guidance on new Sustainable Aviation Fuel Credit   
  
December 22, 2022: IRS releases frequently asked questions about energy efficient home improvements and residential clean energy property credits  
  
January 17, 2023: Remarks by Deputy Secretary of the Treasury Wally Adeyemo at White House event “Lowering Costs: Inflation Reduction Act Briefing”  
  
January 29, 2023: Statement from Deputy Secretary of the Treasury Wally Adeyemo on Implementation of Strong Inflation Reduction Act Worker Protections  
  
February 3, 2023: Treasury Updates Vehicle Classification Standard for Clean Vehicle Tax Credits Under Inflation Reduction Act  
  
February 13, 2023: Treasury, Energy Release Guidance on Inflation Reduction Act Programs to Incentivize Investments in Underserved Communities, Hard-Hit Coal Communities  
  
March 22, 2023: Remarks by Assistant Secretary for Tax Policy Lily Batchelder on Implementation of the Inflation Reduction Act’s Clean Energy Provisions  
  
March 31, 2023: Treasury Releases Proposed Guidance on New Clean Vehicle Credit to Lower Costs for Consumers, Build U.S. Industrial Base, Strengthen Supply Chains 

April 4, 2023: Treasury Releases Guidance to Drive Investment to Coal Communities  
  
April 14, 2023: READOUT: Treasury Convenes Roundtable Discussion on Inflation Reduction Act Incentives for Underserved Communities  
  
April 27, 2023: READOUT: Treasury Department Convenes Roundtable Discussion on Inflation Reduction Act Incentives for Underserved Communities  
  
May 12, 2023: Treasury Department Releases Guidance to Boost American Clean Energy Manufacturing  
  
May 31, 2023: U.S. Departments of Treasury and Energy Release Additional Guidance on Inflation Reduction Act Programs to Incentivize Manufacturing and Clean Energy Investments in Hard-Hit Coal Communities 

June 14, 2023: U.S. Department of the Treasury, IRS Release Guidance on Provisions to Expand Reach of Clean Energy Tax Credits Through President Biden’s Investing in America Agenda 

June 15, 2023: U.S. Department of the Treasury, IRS Release Updated Guidance to Drive Additional Investment to Energy Communities 

August 4, 2023: Home energy audits may qualify for an Energy Efficient Home Improvement Credit 

August 7, 2023: IRS: Builders of qualified new energy efficient homes might qualify for an expanded tax credit under Section 45L 

August 10, 2023: U.S. Department of the Treasury, IRS Release Final Rules and Guidance on Investing in America Program to Spur Clean Energy Investments in Underserved Communities 

August 29, 2023: U.S. Department of the Treasury, IRS Release Guidance on Inflation Reduction Act Provision to Ensure Good-Paying Clean Energy Jobs, Expand Clean Energy Workforce

September 27, 2023: U.S. Department of the Treasury, U.S. Department of Energy, IRS Announce Date for Opening of Applications for Investing in America Program to Spur Clean Energy Investments in Underserved Communities 

September 27, 2023: U.S. Department of the Treasury, IRS Release Guidance to Lower Americans Utility Bills, Increase Energy Efficiency of Homes

October 5, 2023: U.S. Department of the Treasury, IRS Release Guidance to Expand Access to Clean Vehicle Tax Credits, Help Car Dealers Grow Businesses 

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