26 U.S.C. § 48C — Qualifying advanced energy project credit

(a) In general. Your qualifying advanced energy project credit for the year is 30 percent of your qualified investment in a qualifying advanced energy project. (b) Qualified investment. This is the basis of eligible property placed in service that year as part of the project. Rules like the pre-1990 section 46 progress-expenditure rules apply for property paid for in stages. The total qualified investment counted over all years for one project can't exceed the amount the Secretary designated as credit-eligible for that project. (c) Definitions. A "qualifying advanced energy project" is a project — certified in part by the Secretary — that does one of three things. First, it re-equips, expands, or builds an industrial or manufacturing facility to produce or recycle: renewable-energy equipment (solar, water, wind, geothermal, or other renewable sources); fuel cells, microturbines, or energy storage systems; electric grid modernization equipment; carbon-oxide capture, removal, use, or storage equipment; equipment that refines, electrolyzes, or blends renewable or low-carbon fuels or chemicals; energy-conservation technology; electric or fuel-cell vehicles (light, medium, or heavy duty) and their components or charging/refueling infrastructure; heavy hybrid vehicles (14,000+ pounds) and their components; or other advanced energy property the Secretary identifies as cutting greenhouse gases. Second, it re-equips an industrial or manufacturing facility to cut its greenhouse gas emissions by at least 20 percent, through low- or zero-carbon process heat, carbon capture/transport/storage systems, efficiency improvements, or other Secretary-approved industrial technology. Third, it re-equips, expands, or builds a facility for processing, refining, or recycling "critical materials" as defined under the Energy Act of 2020. This category excludes any part of a project that would make property used to refine or blend transportation fuel — unless that fuel is renewable. "Eligible property" is property necessary for one of those three project types, that's tangible personal property (or other tangible property besides a building, if it's an integral part of the facility), and that's depreciable. (d) Program. Within 180 days of enactment, the Secretary — with the Secretary of Energy — had to start a certification program, capped overall at $2,300,000,000. Applicants had a 2-year window to apply, then 1 year after acceptance to prove they meet the certification requirements, then 3 years after certification to actually place the project in service — or the certification lapses. In choosing projects, the Secretary must only consider ones with a realistic shot at commercial viability, and among those, must weigh which create the most domestic jobs, cut the most air pollution or greenhouse gases, offer the greatest innovation and deployment potential, have the lowest full-supply-chain cost per unit of energy or emissions reduction, and can finish the fastest. Not later than 4 years after enactment, the Secretary must review the allocated credits, and can reallocate them if there aren't enough qualifying applications, or if a certification was revoked because litigation or opposition delayed the project. Whenever a certification is made, the applicant's identity and credit amount must be disclosed publicly. (e) Additional allocations. A second, later program works the same way but with its own $10,000,000,000 cap — of which no more than $6,000,000,000 can go to projects outside certain energy-transition census tracts (those described in section 45(b)(11)(B)(iii)) that had already received a project certification before this program began. Applicants get 2 years after acceptance to meet the certification criteria, then 2 years after certification to place the project in service and notify the Secretary — after which the certification lapses (and any expired allocation does not free up more room under the overall cap). If a project actually gets built somewhere materially different from what the application described, the certification becomes invalid. Under this program, the credit rate defaults to only 6 percent instead of 30 percent, unless the project satisfies prevailing-wage and apprenticeship requirements — in which case the full 30 percent applies. The prevailing-wage rule requires paying construction workers no less than the government's locally determined prevailing wage; rules like section 45(b)(7)(B) govern correcting shortfalls and penalties, and rules like section 45(b)(8) impose the apprenticeship requirement. Certifications under this program must also be disclosed publicly. (f) No double benefit. You can't claim this credit for investment that already earned a credit under sections 48, 48A, 48B, 48E, 45Q, or 45V.