Increase in Energy Credit for Solar and Wind Facilities Placed in Service in Connection with Low-Income Communities – 26 U.S. Code § 48(e), 26 U.S. Code § 48E(h)
IRA Statuatory Location:
Tax Code Location:
26 U.S. Code § 48(e), 26 U.S. Code § 48E(h)
New or Modified Provision:
Solar; Wind; Energy Storage
Yes, facilities on Indian land qualify for the 10 percentage point bonus credit.
U.S. Department of Treasury
Provides an additional investment tax credit for small-scale solar and wind facilities in low-income communities. Solar and wind facilities with a maximum net output of less than 5 MW, including associated energy storage technology.
Direct Pay Eligibility:
Yes, for tax-exempt organizations; states; political subdivisions; the Tennessee Valley Authority; Indian Tribal governments; Alaska Native Corporations; and rural electricity co-ops.
Additional information is available on the Resources page.
Period of Availability
The Low-Income Communities Bonus Credit begins in 2023 and is available through 2032 or the year annual GHG emissions from electricity production in the U.S. are equal to or less than 25% of 2022 levels, whichever is later.
Allocated investment credit, capped at 1.8 GW per year. Unused capacity carries over to following year.
Base Credit Amount:
Bonus Credit Amount:
Credit is increased by 10 percentage points for facilities located in low-income communities or on Tribal land. Credit is increased by 20 percentage points for facilities that are part of certain federally subsidized housing programs or that offer at least 50 percent of the financial benefits of the electricity produced to low-income households. This bonus amount will require an application by the taxpayer, with a cumulative total of 1.8 GW of direct current capacity per year available for allocation.