Summer 2023 Solar Industry Update
Low-Income Communities Bonus Newest Guidance
Low-Income Communities Bonus Credit Program (48(e)), awards an upfront 10% or 20% bonus tax credit for a maximum of 1.8 GW
per year of solar projects < 5 MW ac in size. Treasury posted initial guidance in February and final regulations for 2023 awards in
August, largely in line with Notice of Proposed Rulemaking released in June.
ас
dc
490 MW
700 MW
200 MW
1
2
10% credit
low-income community as defined by the New Markets Tax Credit
Indian Land
4
3 qualified low-
20% credit
qualified low-income economic benefit project
income residential
building project
HH
Treasury and the IRS
reserve the right to
reallocate excess
capacity to any
oversubscribed
categories and/or
change initial category
reservation capacities
Treasury and the IRS clarified: how energy storage technology can be included*, how financial benefits for Category 3 & 4 projects
would be calculated and distributed (including requiring Category 4 applicants provide at least a 20% bill credit discount rate for all
low-income households), and how IRS intends to prevent circumvention of the rules (e.g., artificially dividing up projects; changing
project size, location, ownership, or benefits distributions after allocation; placing a project in service prior to allocation).
Due to anticipated applications, and to better serve households in low-income areas, 490 MW of Category 1 is being allocated to
residential behind-the-meter facilities for 2023 allocations, with the remainder reserved for front of the meter facilities and non-
residential behind the meter facilities.
*Storage is not included in any project capacity limits; however, it must be owned by the same party, be on the same or contiguous land, and receive the
same permitting and interconnection as the solar asset. Additionally, the owner must be able to provide that it is charged no less than 50 percent by the
solar asset (a safe harbor applies if the power rating of the storage is less than 2 times the DC capacity of the solar facility).View entire presentation