Home > Services > Tax Credits > Renewable Energy Tax Credits

RENEWABLE ENERGY TAX CREDITS

The Inflation Reduction Act of 2022 (“IRA”) made possible groundbreaking new ways for taxpayers to finance renewable energy development and reduce their tax liabilities. It allows for the transferability by sale of federal income tax credits generated by specific renewable energy tax credit programs, including investment tax credits for solar, wind, geothermal, and others, as well as production tax credits for electricity from renewable sources, hydrogen fuel, and renewable energy components produced and sold in the U.S. Project owners can now sell energy credits to taxpayers without complex ownership arrangements. 

Additionally, the IRA now permits tax-exempt organizations, rural electric cooperatives, and governmental entities, including tribal entities, among others, to benefit from renewable energy project developments through a new direct payment option that provides for cash refunds to such entities in lieu of tax credits. The ability to either transfer by sale or apply for a cash refund with respect to tax credits generated by specific renewable energy projects is transforming the energy landscape. 

Only tax credits derived from specified renewable energy projects can be sold or refunded in lieu of sale. These include:

  • the alternative fuel vehicle refueling property credit (IRC 30C)
  • renewable electricity production credit (IRC 45)
  • carbon oxide sequestration credit (IRC 45Q)
  • zero-emission nuclear power production credit (IRC 45U)
  • clean hydrogen production credit (IRC 45V)
  • advanced manufacturing production credit (IRC 45X)
  • renewable energy investment credit (e.g., solar, wind, geothermal, etc.) (IRC 48)
  • the qualifying advanced energy project credit (IRC 48C).

Our tax credits team helps clients make the best use of energy tax credit transfers by navigating the options available. We represent buyers, sellers, and broker-dealers in tax credit transactions, assisting with deal structure, compliance with regulations for buying and selling, financing, and other aspects of the transaction. We have assisted taxpayers in understanding and applying for qualifying advanced energy project credits, broker-dealers in connection with their marketing platforms, as well as sellers and buyers in the sale of investment and production tax credits.  

The U.S. Department of the Treasury issued guidance on the transfer of tax credits derived from investments in renewable energy projects. Read an overview here.

R&D Tax Credits

The U.S. Research and Development (R&D) credit is a tax incentive intended to encourage innovation and technological advancement, providing a financial benefit for those investments. We advise clients on the process of obtaining these credits against their federal income tax for qualified R&D expenditures.

Clean and Natural Gas Credits

Our team advises on the use of renewable natural gas tax credits as well as clean fuel production credits.

Empowerment Zone Employment Credit

The Empowerment Zone Employment Credit is a tax incentive aimed at encouraging businesses to hire and retain employees in designated empowerment zones, which are economically distressed areas. This credit provides financial incentives to employers to stimulate job creation and economic development in these zones, and our attorneys can assist with determining eligibility.

Publications

Proposed Regulations for Advanced Manufacturing Production Credit: Section 45X and Its Impact on Clean Energy Components

Missouri Department of Economic Development Proposes Changes to its Historic Tax Credit Regulations

Ohio Enacts New State Low-Income Housing Tax Credit (LIHTC) Program

Selling Federal Energy Tax Credits: Who, What, When, and How…and Other Important Points

Now is the time to electrify your commercial vehicles

Recent amendments to Illinois’ Historic Preservation Tax Credit Program provide clarity for investors

What employers need to know about the CARES Act Employee Retention Payroll Tax Credit

Key tax provisions in the CARES Act

New Opportunity Zone investment may reduce capital gains liability

IRS releases updated safe harbors for management contracts in tax-exempt bond-financed projects

Blog Posts

Unpacking the new qualified business income deduction for real estate rentals

Reinstatement of a LIHTC LURA following foreclosure

LIHTC exit strategies: Foreclosure

LIHTC exit strategies: Right-sizing the loan

LIHTC exit strategies: Loan sale

Getting the house in order: The early stages of a LIHTC workout

The valuation process for LIHTC projects in financial distress: Part II

The valuation process for LIHTC projects in financial distress: Part I

What are the unique dynamics of a low-income housing tax credit workout?

Low-income housing tax credit workouts and bankruptcies: Understanding the basics

News

TC Tax Controversy Team Helps Obtain Key Taxpayer Victory at Missouri Supreme Court

Thompson Coburn Enhances Tax Credits Practice with Renewable Energy Tax Credits Focus

Transport Topics turns to Nick Kappas for overview of new tax credit for EV commercial vehicles

Congratulations to the new Thompson Coburn partners for 2021

Sara Melly selected for 2020-2021 Class of Leadership St. Louis

Thompson Coburn lawyers help a much-in-demand charter school grow

Elizabeth Feldmeir named to St. Louis Business Journal’s 40 Under 40 list

Janette Lohman elected second vice president of the Institute of Professionals in Taxation

Sara Melly joins Thompson Coburn’s Tax Credits practice

Jarrod Sharp named to 2016-17 Class of Leadership St. Louis

Real Estate Group retains high ranking in 2015 ‘Best of the Best’ survey

25 Thompson Coburn attorneys recognized in 2015 Chambers USA

27 Thompson Coburn attorneys recognized in 2014 Chambers USA

Thompson Coburn represents U.S. Bank in financing named Wall Street Journal's 'Deal of the Week'

Three partners named 2013 Up & Coming attorneys

Larry Katzenstein offers charitable organizations guidance on tax fallout of ‘fiscal cliff’ law

Jarrod Sharp joins Thompson Coburn as counsel

Partner
St. Louis

Mariquita is an experienced and results-driven M&A and tax attorney who negotiates and closes complex transactions.

Mariquita is an experienced and results-driven M&A and tax attorney who...

Mariquita Barbieri, LLM
Partner
St. Louis

Over the last decade, Elizabeth has worked directly on several billion dollars in tax credit transactions and represented clients in a variety of complex real estate and ...

Over the last decade, Elizabeth has worked directly on several billion doll...

Elizabeth Feldmeir
Partner
St. Louis

Garrett counsels banks, financial institutions and other businesses on a variety of tax credit, commercial transaction and regulatory issues.

Garrett counsels banks, financial institutions and other businesses on a va...

Garrett Fischer
Partner
St. Louis

Nick advises businesses, tax-exempt organizations, and governmental entities on federal and state tax matters, including tax credit finance, tax-exempt bonds, and transac...

Nick advises businesses, tax-exempt organizations, and governmental entitie...

Nick Kappas
Associate
St. Louis

Clayton is an associate in the Firm's tax and public finance practice groups.

Clayton is an associate in the Firm's tax and public finance practice group...

Clayton Voss