Webinar Recording: Inflation Reduction Act Implications for Renewables and Energy Transition

August.15.2022

On Friday, August 12, 2022, the House passed The Inflation Reduction Act, the sweeping legislation on health care, climate and taxes, by a 220-207 margin after passing the Senate on August 7th. The legislation will reshape and expand tax credit incentives for a broad range of renewable energy resources and could transform the tax equity market.  President Biden is expected to sign the bill into law this week, marking the U.S.’s most significant investment in clean energy to date. Among other things, the IRA will:

  • create a two-tier credit that requires compliance with prevailing wage and apprenticeship requirements to capture the full available credit;
  • include numerous adders depending on a project’s location and amount of U.S.-sourced content;
  • expand existing incentives for solar and wind for at least 10 years;
  • expand tax credits for carbon capture;
  • create a new tax credit for clean hydrogen production with an alternative tax credit for investment in clean hydrogen production facilities;
  • implement a limited “direct pay” feature where tax credits can be treated as a cash refund from the government; and
  • add a new transferability concept in which tax credits can effectively be sold, for cash, to third parties.

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