US clean electricity tax credit expands to cover geothermal projects
Investment and production tax credits under the US Inflation Reduction Act have now been expanded to cover geothermal power projects.
The clean energy tax credit provisions of the United States Government under the Biden Administration has now been expanded to cover electricity generation from geothermal energy, as well as nuclear, hydropower, and marine wave energy. These are the same tax credits under the 2022 Inflation Reduction Act that previously only applied to wind and solar power.
With this development, the Clean Electricity Production Credit and Clean Electricity Investment Credit are now considered technology-neutral tax credits that apply to facilities generating electricity with zero greenhouse gas emissions. The existing Production Tax Credit and Investment Tax Credit will be available to projects that began construction before 2025. Qualifying projects placed in service after December 31, 2024 will be eligible for the new Clean Electricity Credits.
According to analysis from the Department of Energy, the tech-neutral credits, along with other Inflation Reduction Act and Bipartisan Infrastructure Law provisions, are expected to save American families up to $38 billion on electricity bills through 2030.
“The final rules issued today will help ensure America’s clean energy investment boom continues – driving down utility costs for American families and small businesses, creating good-paying construction jobs, and strengthening energy security by making the U.S. more resistant to price shocks,” said U.S. Secretary of the Treasury Janet L. Yellen.
“America’s clean energy boom is no coincidence, it’s President Biden’s industrial strategy in action: utilizing a range of incentives to accelerate innovative carbon cutting technologies and make the nation more energy resilient,” said U.S. Secretary of Energy Jennifer M. Granholm.
“Today’s final guidance helps provide clean energy producers the clarity needed to deploy more clean energy solutions at scale to drive down costs for more American families and deliver future-facing careers for America’s workforce.”
Source: The White House and U.S. Department of Treasury
