Incentives and Compliance with Energy Provisions of the Inflation Reduction Act (IRA)

Clark Hill attorneys have substantial experience and advise clients on:

• Tax equity financings, project finance, and partnership/joint venture transactions for solar, wind, and battery energy projects.
• Purchases of tax credits: for those seeking to purchase tax credits.
• Bonus tax credits for domestic content equipment, Energy Communities, low-to-moderate income communities, and historically polluted areas.
• New tax credits for manufacturing renewable energy equipment in the United States.
• New “domestic content” manufacturing rules under IRA for supply chain and equipment.
• Electric vehicle and EV manufacturing.

The IRA has adopted a new framework for new participants and institutions namely:

• Direct Pay & IRS refunds: in the past nonprofits, churches, schools, universities, etc. typically could not monetize tax credits. Now the IRA  offers “Direct Pay” to nonprofit entities, which acts as a direct refund from the IRS. Clark Hill can assist nonprofit clients in obtaining a Direct Pay refund from the Internal Revenue Service for clean energy projects.
• Transferability of tax credits: developers can transfer tax credits one-time to those seeking to purchase tax credits. Clark Hill can assist in structuring and drafting these transactions (without having to use partnership model and avoiding long-term asset management or ownership issues).

For a detailed description and analysis of the IRA’s extensive benefits and clean energy provisions, please see our alerts below.