Inflation Reduction Act Includes Expansive Tax Incentives for Clean Energy Investors and Developers


On July 27, 2022, Senator Joe Manchin and Senate Majority Leader Chuck Schumer reached an agreement on a budget reconciliation bill and released the “Inflation Reduction Act of 2022” (the “Act”). A significant part of the Act focuses on energy tax changes aimed at fighting climate change and promoting domestic energy security. To those ends, the Act extends and expands existing tax credits and adds several new energy tax credits for clean energy projects. The benefits of this historic legislation for investors and developers in the clean energy infrastructure space cannot be overstated.

Here are key highlights.1

 The Senate is expected to vote on the Act during the first week in August, just before its scheduled August recess. If passed by the Senate, the legislation would then go to the House for approval. The House is currently in recess.


FOOTNOTES

1 These highlights do not address any tax incentives for individuals, residential properties, agriculture, or electric vehicles and charging stations.

2 Unless otherwise stated, all capitalized Section references are to the Internal Revenue Code of 1986, as amended.


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National Law Review, Volumess XII, Number 215