[Federal Register Volume 89, Number 133 (Thursday, July 11, 2024)]
[Notices]
[Pages 56924-56926]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15226]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
Credit for Renewable Electricity Production and Publication of
Inflation Adjustment Factor and Reference Price for Calendar Year 2024
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Notice of publication.
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SUMMARY: The 2024 inflation adjustment factor and reference price are
used in determining the availability of the credit for renewable
electricity production under section 45 (section 45 credit).
FOR FURTHER INFORMATION CONTACT: Charles Hyde, CC:PSI:6, Internal
Revenue Service, 1111 Constitution Avenue NW, Washington, DC 20224,
(202) 317-6853 (not a toll-free number).
SUPPLEMENTARY INFORMATION: The 2024 inflation adjustment factor and
reference price apply to calendar year 2024 sales of kilowatt hours of
electricity produced in the United States or a possession thereof from
qualified energy resources.
Inflation Adjustment Factor: The inflation adjustment factor for
calendar year 2024 for qualified energy resources is 1.9499.
Reference Price: The reference price for calendar year 2024 for
facilities producing electricity from wind is 3.15 cents per kilowatt
hour. The reference prices for facilities producing electricity from
closed-loop biomass, open-loop biomass, geothermal energy, solar
energy, municipal solid waste, qualified hydropower production, and
marine and hydrokinetic renewable energy have not been determined for
calendar year 2024.
Phaseout Calculation: Because the 2024 reference price for
electricity produced from wind (3.15 cents per kilowatt hour) does not
exceed 8 cents multiplied by the inflation adjustment factor (1.9499),
the phaseout of the credit provided in section 45(b)(1) does not apply
to such electricity sold during calendar year 2024. For electricity
produced from closed-loop biomass, open-loop biomass, geothermal
energy, solar energy, municipal solid waste, qualified hydropower
production, and marine and hydrokinetic renewable energy, the phaseout
of the credit provided in section 45(b)(1) does not
[[Page 56925]]
apply to such electricity sold during calendar year 2023.
Inflation Reduction Act Amendments: Section 45 was amended by
section 13101 of Public Law 117-169, 136 Stat. 1818 (August 16, 2022),
commonly known as the Inflation Reduction Act of 2022 (IRA). The IRA
changed the manner in which the section 45 credit amounts are
calculated for any qualified facility placed in service after December
31, 2021. In the case of any qualified facility placed in service
before January 1, 2023, the section 45 credit amounts are determined
under the calculation rules provided in section 45 prior to the IRA
amendments.
As amended by the IRA, section 45(b)(6)(A) provides that, in the
case of any qualified facility that satisfies the requirements of
section 45(b)(6)(B), the credit amount determined under section 45(a)
(determined after the application of section 45(b)(1) through (5) and
without regard to section 45(b)(6)) is equal to such amount multiplied
by 5. A qualified facility satisfies the requirements of section
45(b)(6)(B) if it is placed in service after December 31, 2021, and it
is one of the following: (i) a facility with a maximum net output of
less than 1 megawatt (as measured in alternating current); (ii) a
facility the construction of which began prior to January 29, 2023,
which is the date that is 60 days after the publication of the guidance
with respect to the requirements of section 45(b)(7)(A) (prevailing
wage requirements) and section 45(b)(8) (apprenticeship requirements);
or (iii) a facility that satisfies the requirements of section
45(b)(7)(A) and (8).\1\ The IRA also added bonus credit amounts with
respect to qualified facilities placed in service after December 31,
2022, that meet domestic content requirements under section 45(b)(9)
\2\ or energy community requirements under section 45(b)(11).\3\
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\1\ See Sec. Sec. 1.45-6, 1.45-7, 1.45-8, and 1.45-12 of the
Income Tax Regulations for additional information regarding the
requirements of section 45(b)(6)(B).
\2\ See Notice 2023-38, 2023-22 I.R.B. 872 (May 12, 2023) and
Notice 2024-41, IR-2024-140 (May 16, 2024), corrected at IR 2024-147
(May 24, 2024), for additional information regarding the domestic
content bonus credit.
\3\ See Notice 2024-30, 2024-16 I.R.B. 878 (April 15, 2024), for
additional information regarding the energy community bonus credit.
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The IRA amended the phaseout of the section 45 credit for wind
facilities under section 45(b)(5) such that it does not apply to
facilities placed in service after December 31, 2021. The IRA also
added a new phaseout of the section 45 credit under section 45(b)(10)
in the case of qualified facilities placed in service after December
31, 2022, for taxpayers making an elective payment election under
section 6417. The IRA also amended the credit amount reduction under
section 45(b)(3) in the case of qualified facilities the construction
of which began after August 16, 2022.
The IRA amended section 45(d)(4) to restore the section 45 credit
for electricity produced in solar energy facilities in the case of
qualified facilities placed in service after December 31, 2021, and the
construction of which begins before January 1, 2025. Effective for
facilities placed in service after December 31, 2022, the IRA (1)
removed the one-half reduction of the credit amount under section
45(b)(4)(A) for qualified hydropower facilities and marine and
hydrokinetic renewable energy facilities and (2) amended the definition
of marine and hydrokinetic renewable energy under section 45(c)(10) and
the definition of a marine and hydrokinetic renewable energy facility
under section 45(d)(11). The IRA also extended certain deadlines in the
definitions under section 45(d) for wind facilities, closed-loop
biomass facilities, open-loop biomass facilities, geothermal
facilities, landfill gas facilities, trash facilities, qualified
hydropower facilities, and marine and hydrokinetic renewable energy
facilities.
Credit Amount for a Qualified Facility Placed in Service before
January 1, 2022: As required by section 45(b)(2), the 1.5 cent amount
provided in section 45(a)(1) is adjusted by multiplying such amount by
the inflation adjustment factor for the calendar year in which the sale
occurs. If any amount as increased under section 45(b)(2) is not a
multiple of 0.1 cent, such amount is rounded to the nearest multiple of
0.1 cent. In the case of electricity produced in open-loop biomass
facilities, landfill gas facilities, trash facilities, qualified
hydropower facilities, and marine and hydrokinetic renewable energy
facilities, section 45(b)(4)(A) requires the amount in effect under
section 45(a)(1) for such calendar year (before rounding to the nearest
0.1 cent as required by section 45(b)(2)) to be reduced by one-half.\4\
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\4\ As amended by the IRA and discussed later in this notice,
the one-half reduction under section 45(b)(4)(A) no longer applies
to qualified hydropower facilities and marine and hydrokinetic
renewable energy facilities placed in service after December 31,
2022.
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Under the calculation required by section 45(b)(2), the credit for
renewable electricity production for calendar year 2024 determined
under section 45(a) is 2.9 cents per kilowatt hour on the sale of
electricity produced in any qualified facility placed in service before
January 1, 2022, from the qualified energy resources of wind, closed-
loop biomass, and geothermal energy, and 1.5 cents per kilowatt hour on
the sale of electricity produced in any qualified facility placed in
service before January 1, 2022, from the qualified energy resources of
open-loop biomass, landfill gas, trash, qualified hydropower, and
marine and hydrokinetic renewable energy.
Credit Amount for a Qualified Facility Placed in Service after
December 31, 2021: As required by section 45(b)(2), the 0.3 cent amount
provided in section 45(a)(1) is adjusted by multiplying such amount by
the inflation adjustment factor for the calendar year in which the sale
occurs. If the 0.3 cent amount as adjusted for inflation is not a
multiple of 0.05 cent, the amount is rounded to the nearest multiple of
0.05 cent. In the case of electricity produced in open-loop biomass
facilities, landfill gas facilities, trash facilities, qualified
hydropower facilities, and marine and hydrokinetic renewable energy
facilities, section 45(b)(4)(A) requires the amount in effect under
section 45(a)(1) for such calendar year (determined before rounding as
required by section 45(b)(2)) to be reduced by one-half.
Under the calculation required by section 45(b)(2), the credit for
renewable electricity production for calendar year 2024 determined
under section 45(a) is 0.6 cents per kilowatt hour on the sale of
electricity produced in any qualified facility placed in service after
December 31, 2021, from the qualified energy resources of wind, closed-
loop biomass, geothermal energy, and solar energy, and 0.3 cents per
kilowatt hour on the sale of electricity produced in any qualified
facility placed in service after December 31, 2021, from the qualified
energy resources of open-loop biomass, landfill gas, and trash. The
credit for renewable electricity production for calendar year 2024
determined under section 45(a) is also 0.3 cents per kilowatt hour on
the sale of electricity produced in any qualified facility placed in
service after December 31, 2021, and before January 1, 2023, from the
qualified energy resources of qualified hydropower and marine and
hydrokinetic renewable energy.
Credit Amount for Qualified Hydropower Facilities and Marine and
Hydrokinetic Renewable Energy Facilities Placed in Service after
December 31, 2022: The one-half reduction under section 45(b)(4)(A) no
longer applies to qualified hydropower facilities and marine and
hydrokinetic renewable energy facilities placed in
[[Page 56926]]
service after December 31, 2022. Accordingly, under the calculation
required by section 45(b)(2), the credit for renewable electricity
production for calendar year 2024 determined under section 45(a) is 0.6
cents per kilowatt hour on the sale of electricity produced in any
qualified facility placed in service after December 31, 2022, from the
qualified energy resources of qualified hydropower and marine and
hydrokinetic renewable energy.
(Authority: 45(e)(2)(A) (26 U.S.C. 45(e)(2)(A)) of the Internal
Revenue Code.)
Christopher T. Kelley,
Special Counsel to the Associate Chief Counsel, (Passthroughs and
Special Industries).
[FR Doc. 2024-15226 Filed 7-10-24; 8:45 am]
BILLING CODE 4830-01-P