June 14 (UPI) — State and local governments can get tax credits for clean energy efforts as outlined in last year’s Inflation Reduction Act, and U.S. government agencies said Wednesday they can offer guidance.
The U.S. Treasury Department and the Internal Revenue Service offered guidance Wednesday to non-profits, state and local governments, as well as tribal entities, on how best to tap into tax credits the agencies said would create more jobs and a cleaner economy.
Treasury Secretary Janet Yellen said last year’s bipartisan Inflation Reduction Act is filled with tax reliefs that provide a catalyst to accelerate net-zero ambitions.
“They will act as a force multiplier, bringing governments and nonprofits to the table,” Yellen said. “More clean energy projects will be built quickly and affordably, and more communities will benefit from the growth of the clean energy economy.”
The guidance brings potential tax relief to entities that would otherwise be exempt. Schools, for example, could get tax credits toward electric buses, while energy cooperatives would find an incentive to invest more in renewable energy.
John Podesta, the senior advisor to President Joe Biden on clean energy and innovation, said the guidance “will make it easier for local governments, tribes, territories, nonprofits, schools, houses of worship and more to invest in clean energy, allowing them to save money, improve public health, and better serve their communities.”
The guidance is filled with niche terms such as transferability, which allows a company that would otherwise not be eligible for a full tax credit to sell what it is eligible for to a third party for cash.
To help explain some of the proposed tax relief, the Treasury Department said it would start an outreach program, starting with a series of webinars that will begin June 29.
The Inflation Reduction Act, signed in August, dedicates more than $370 billion toward lowering energy costs and incentivizing private investments in clean energy projects. The investment was seen as a boon for the clean energy economy as the administration pushes for a 100% clean energy grid goal by 2035 and net-zero carbon emissions by 2050.