With additional tax credit value available to energy projects under the Inflation Reduction Act, renewable energy companies should closely evaluate their project locations—particularly those projects that may be located in a “brownfield area,” given the recent changes in law related to emerging contaminants perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS), and certain “bonus credits” available to projects in those locations.
On May 29, the Treasury Department and the Internal Revenue Service published proposed regulations (the proposed rules) providing guidance regarding the Internal Revenue Code (the Code) Section 45Y Clean Electricity Production Credit (the Section 45Y Credit) and Code Section 48E Clean Electricity Investment Credit (the Section 48E Credit). The Section 45Y Credit and Section 48E Credit were added by the Inflation Reduction Act and, if claimed by taxpayers, replace the credits previously allowed by Sections 45 and 48 of the code.