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June 14 (UPI) — State and local governments now have the opportunity to receive tax credits for their clean energy initiatives, thanks to the provisions in last year’s Inflation Reduction Act. The U.S. Treasury Department and the Internal Revenue Service have provided guidance to non-profits, state and local governments, and tribal entities on how to make the most of these tax credits, which are aimed at creating jobs and promoting a cleaner economy.
Treasury Secretary Janet Yellen believes that the tax reliefs in the bipartisan Inflation Reduction Act serve as a catalyst for accelerating net-zero ambitions. She stated, “They will act as a force multiplier, bringing governments and nonprofits to the table. More clean energy projects will be built quickly and affordably, and more communities will benefit from the growth of the clean energy economy.”
Entities that were previously exempt from tax relief benefits can now take advantage of them. For example, schools can receive tax credits for electric buses, and energy cooperatives are given an incentive to invest more in renewable energy.
John Podesta, senior advisor to President Joe Biden on clean energy and innovation, expressed his support for the guidance, stating that it will make it easier for various organizations, including local governments, tribes, territories, nonprofits, schools, and houses of worship, to invest in clean energy. This will allow them to save money, improve public health, and better serve their communities.
The provided guidance includes terms such as transferability, which allows companies to sell their eligible tax credits to a third party for cash, even if they are not eligible for the full credit. To further explain the proposed tax relief, the Treasury Department is initiating an outreach program consisting of a series of webinars starting on June 29.
The Inflation Reduction Act, signed in August, allocates over $370 billion towards reducing energy costs and incentivizing private investments in clean energy projects. This investment is seen as a significant boost for the clean energy economy, as the administration aims to achieve a 100% clean energy grid by 2035 and net-zero carbon emissions by 2050.
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