Treasury, IRS provide guidance for certain clean energy producers related to domestic content; request additional comments for upcoming regulations

IR-2023-252, Dec. 28, 2023

WASHINGTON — The Department of the Treasury and the Internal Revenue Service today issued Notice 2024-9PDF that provides procedures for applicable entities to claim the statutory exception to the application of the phaseouts for elective payment projects that begin construction during calendar year 2024 that fail to satisfy the domestic content requirement.

The phaseouts for elective payment and the statutory exception apply to the following credits:

• Renewable Electricity Production Credit (IRC § 45)
• Clean Electricity Production Credit (IRC § 45Y)
• Energy Credit (IRC § 48)
• Clean Electricity Investment Credit (IRC § 48E)

Applicable entities are generally tax-exempt organizations, state and local governments, Indian tribal governments, Alaska Native Corporations, the Tennessee Valley Authority or rural electric cooperatives.

Domestic content is generally defined as steel, iron or manufactured products that are manufactured or produced in the United States. Generally, unless a statutory exception applies, the phaseouts for elective payment apply to projects that produce 1 or more megawatts of electricity and that fail to satisfy the domestic content requirement.

The notice also requests comments, which will help develop future proposed regulations. In addition to general comments, the Treasury Department and the IRS request comments that address the number of qualified facilities that are expected to be affected by the phaseouts for elective payment, factors in defining overall costs of construction and documentation and substantiation requirements.

As described in the notice, written comments should be submitted by Feb. 26, 2024. The subject line for the comments should include a reference to Notice 2024-09. Comments may be submitted electronically via the Federal eRulemaking Portal (type IRS-2023-0062 in the search field to find this notice and submit comments).

Alternatively, comments may be submitted by mail to:

Internal Revenue Service
CC:PA:LPD:PR (Notice 2024-09)
Room 5203
P.O. Box 7604, Ben Franklin Station
Washington, DC 20044

More information about clean energy guidance can be found on the IRS Inflation Reduction Act of 2022 webpage.