On Aug. 29, the Treasury Department, IRS and Department of Energy (DOE) announced that they had received more than 800 project proposals seeking, in total, almost $40 billion in tax credits for Round 2 of the Qualifying Advanced Energy Project Tax Credit (48C) Program. Those proposals represent $200 billion in total project investments.

The IRS and DOE have notified applicants on the 48C Portal that the full application period is now open, and they encouraged applicants to apply for the next stage of evaluation to determine which projects will receive a tax credit. Applications are due by Friday, Oct. 18 at 11:59 p.m. Eastern time. Applicants are encouraged to use the application templates available on the 48C Portal.

The tax credits are available to manufacturers and other entities that invest in qualifying advanced energy projects. These entities may apply for the credits to the DOE. A total of $10 billion has been allocated for the credits under the Inflation Reduction Act, with $4 billion set aside for projects in certain energy communities over the duration of the program.

The tax credit equals 30 percent of qualified investment costs for projects that meet prevailing wage and apprenticeship requirements or 6 percent for projects that don't meet those requirements.

A qualifying project is defined as one that:

• Re-equips, expands or establishes an industrial or a manufacturing facility to produce or recycle specified advanced energy property (defined in Notice 2023-18);

• Installs technology in an industrial or manufacturing facility to reduce greenhouse gas emissions by at least 20 percent; or

• Re-equips, expands or establishes an industrial facility to process, refine or recycle critical materials

Projects that produce property for refining or blending nonrenewable transportation fuels are excluded.

In Round 2, the IRS encouraged more than 450 projects across 46 states and the District of Columbia, with over $22.5 billion in tax credits requested. Approximately $4.8 billion of the $22.5 billion in tax credits encouraged are in historic energy communities. These projects span large, medium and small businesses and nonprofits.

There is up to $6 billion in tax credit allocations for the second round for the 48C(e) program, including approximately $2.5 billion for projects located in 48C(e) designated energy communities.

Applicants that submitted a project proposal, also known as a concept paper, may now submit a full application on the 48C Portal, whether they received an encourage or discourage letter.

There will be a webinar for applicants on Monday, Sept. 16. The registration link will be made available on the 48C landing page.