U.S. sets new guidelines for tax credit seeking clean energy projects
- August 30, 2023
- Posted by: Quatro Strategies
- Categories: ESG & Renewable Energy, Sanctions & Regulation, United States
The U.S. Department of the Treasury has released new guidelines outlining wage and apprenticeship requirements for projects aiming to utilize clean energy tax credits. These guidelines build upon rules set out by the Inflation Reduction Act (IRA) of the previous year. Under the new Internal Revenue Service (IRS) rules, meeting the prevailing wage requirements set by the Labor Department and employing qualified apprenticeships will enable companies constructing eligible clean energy facilities to earn five times the tax credits’ baseline value.
The Inflation Reduction Act offers increased credit or deduction amounts for taxpayers adhering to certain Prevailing Wage Act (PWA) requirements during the construction, alteration, or repair of qualified energy production facilities. The increased credit or deduction is generally five times the base amount for those satisfying the PWA conditions.
The proposed regulations also provide guidance for taxpayers who initially fail to meet PWA requirements but seek to rectify this failure by complying with specific correction and penalty procedures.
According to the IRS statement, the prevailing wage requirements necessitate that taxpayers ensure all laborers and mechanics employed by them, contractors, or subcontractors on the construction, alteration, or repair of qualified facilities are paid wages not less than prevailing rates determined by the Department of Labor in line with the Davis-Bacon Act for the relevant type of work and geographic area.
These new guidelines are aimed at promoting the use of clean energy tax credits while ensuring fair compensation for laborers and promoting workforce development through apprenticeships.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
EU’s U.S. LNG share hits 60% as dependency debate intensifies
Europe’s post-2022 gas strategy is sliding into a new kind of dependence, and the January import numbers put a hard figure on it. The European Union sourced 60% of its liquefied natural gas from the United States this month. The bloc took in 5.36 million metric tons of U.S. LNG in January, one of the largest monthly volumes on record, reflecting both seasonal demand from colder weather and a broader structural drift toward U.S. supply as the default marginal molecule for Europe.
This is the logical endpoint of decisions taken after Russia’s 2022 invasion of Ukraine, when Europe rapidly substituted pipeline flows from Russia with seaborne LNG, much of it from the U.S. The January data underscore how complete that substitution has become in LNG terms: U.S. supply is not merely “important” but dominant, and the dominance is expected to deepen further in 2026.
Japan’s Tokyo Gas deepens U.S. energy bet with $525M Chevron asset deal
TG Natural Resources (TGNR), a strategic joint venture between Tokyo Gas Co. and Castleton Commodities International, has announced its acquisition of a 70% stake in the East Texas gas assets owned by Chevron U.S.A. Inc., a subsidiary of Chevron Corporation. The deal, valued at $525 million, represents a significant expansion of Tokyo Gas’ presence and investment in the American energy market.
This acquisition, formally announced on Tuesday, aligns closely with U.S. President Donald Trump’s broader policy push aimed at boosting American gas exports. Although Tokyo Gas has emphasized that this decision was made independently of Trump’s policies—highlighting that it had been under consideration even before his administration—the significant scale of the investment is expected to garner favorable attention from U.S. policymakers.
Indian Prime Minister Modi sets ambitious goal of $6.69 trillion economy by 2030
Indian Prime Minister Narendra Modi is aiming for an ambitious economic target, aiming to roughly double the country’s economy and exports by the end of this decade. Modi has been emphasizing economic growth as a major achievement in his election rallies, expressing confidence in making…