The US Treasury Department has announced a new form of incentive to promote the domestic manufacturing of clean energy projects under the Investment Tax Credit, allowing eligible projects to receive up to a 10% bonus on qualified expenditures for domestic content.
What is the Investment Tax Credit?
The Investment Tax Credit (ITC) is a federal tax credit that has been put in place to help incentivize investment in renewable energy sources such as solar, wind, geothermal, hydro, and others. The ITC enables individuals and businesses to take a 30% credit for the cost of installing a renewable energy system. This credit applies to both residential and commercial installations.
The Bonus for Domestic Content
The US Treasury Department has announced that eligible clean energy projects, such as solar panel and wind turbine manufacturers, can receive up to a 10% bonus on qualified expenditures for domestic content. The goal is to encourage the manufacturing of clean energy products within the US, ultimately creating jobs and reducing the country’s reliance on foreign sources of energy.
How Will It Work?
Eligible projects seeking the 10% bonus will need to demonstrate that 70% or more of its expenditures have occurred on qualified components and services sourced within the US. Once the eligibility is confirmed, the bonus will be applied to the total qualified expenditures for the project.
The US Treasury Department’s new incentive is a step towards creating a more sustainable and domestically-sourced energy industry. With this bonus, clean energy projects will be able to further invest in domestic manufacturing, reducing the country’s reliance on foreign sources of energy and contributing to job growth.