The US Treasury Department and the IRS have released the final rules of the US Securities and Exchange Commission. 48 Energy Credit - also known as Federal Investment Tax Credit (ITC). For decades, ITC has driven the development of clean energy in the United States by providing tax credits (typically 30% of project costs) for eligible investments in clean energy properties, although the level of credits varies over time and technology.

Although ITC has promoted clean energy projects, their effectiveness is limited by the need for frequent short-term and retrospective legislative extensions, which creates uncertainty and makes it more difficult for clean energy developers to invest and finance projects.

The Inflation Reduction Act extends the ITC and closely related Production Tax Credit (PTC) until 2025, at which point ITC and PTC will shift towards a technology neutral approach and provide full credit for project initiation until at least 2033.

US Deputy Secretary of the Treasury Wally Adeyemo stated, "By ending the short-term legislative extension of the ITC, the Inflation Reduction Act enables clean energy project developers to make significant investments and produce new clean electricity to meet the growing demand for electricity. Today's announcement will help reduce consumers' utility bills, strengthen US energy security, and create high paying job opportunities

Although the final rule retains the core framework of the proposed rules and guidelines released by the Ministry of Finance and the National Taxation Bureau in November 2023, it clarifies the general rules of the ITC and its definition of eligible assets for credit, and takes into account 350 written opinions from stakeholders. The specific issues raised by commentators regarding the final rule include:

Offshore wind power: The final rule retains the clarification in the proposed rule that owners of offshore wind farms can apply for credit for their own power regulation and transmission equipment (such as submarine cables).
Geothermal heat pump: The final rule clearly stipulates that owners of underground coils can apply for ITC if they have at least one heat pump used in conjunction with the coil.
Biogas: The final rule specifies which assets are qualified biogas assets and what are the components of qualified biogas assets.
The definition of "energy project": The final rule modifies the definition of energy projects, requiring ownership of energy property to add four or more factors from the seven factor list, and clarifying that taxpayers can evaluate these factors at any time during construction or construction. The tax year in which energy assets are put into use.
Collocation of energy storage: The final rule specifies Sec. Energy storage technology located in the same location as qualified facilities and sharing power regulation equipment can apply for 48 credits (ITC), and the facility's Section can apply for 45 credits (PTC).
Hydrogen storage: The final rule specifies that hydrogen energy storage properties do not require the storage of hydrogen gas that is only used as an energy source and not for other purposes.

The project can apply for Sec. 48 ITC targets projects that begin construction before January 1, 2025. After this date, ITC and PTC will transition to technology neutral "Clean Power Production Credit" (Section 45Y) and "Clean Power Investment Credit" (Section 45Y). 48E). Recognized technologies include wind energy, solar energy, hydropower, ocean and fluid power, nuclear fission and fusion, geothermal energy, and certain types of waste to energy recovery assets (WERP)