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48C Qualifying Advanced Energy Project Tax Credit

A recap, update, and next steps for a $10 billion investment

On January 10, 2025, the Internal Revenue Service announced six billion in allocations in the second round of the 48C Qualifying Advanced Energy Project Tax Credit, a 30 percent investment tax credit. The 48C program, originally established by the American Recovery and Reinvestment Act of 2009, was expanded with a $10 billion investment under section 13501 of the Inflation Reduction Act.

Program Scope:

The second-round announcement marks the full allocation of the $10 billion expansion, which includes approximately 250 projects spanning over 40 states and total project investments of more than $44 billion. Projects selected in the second round alone are estimated to generate 30,000 construction jobs over four years, 10,000 of which are located in energy communities. 

Program Objectives and Requirements:

The objective of the 48C program is to fund critical projects that:

  • Expand US clean energy manufacturing and recycling capacity
  • Expand US critical materials processing and refining capacity
  • Drive process efficiency and reduce greenhouse gas emissions at US industrial facilities

To receive the 30 percent investment tax credit, all projects must meet the prevailing wage and apprenticeship requirements. Additionally, at least four billion of the $10 billion must be allocated to projects in designated 48C energy communities, including communities with closed coal facilities.

A comparison of each round:
Round 1Round 2
Announcement DateMarch 29, 2024January 10, 2025
Total Amount Allocated$4 billion$6 billion
Amount Allocated to 48C Energy Communities$1.5 billion$2.5 billion
Concept Papers ReceivedConcept papers requested nearly $42 billion in tax credits800 concept papers requested over $40 billion in tax credits
Full Applications Received250 applications requesting > $13.5 billion350 applications requesting > $16 billion in tax credits
Clean energy manufacturing and recycling$2.7 billion (67%)$3.8 billion (63%)
Critical materials recycling, processing, and refining$800 million (20%)$1.5 billion of $6 billion (25%)
Industrial decarbonization$500 million (13%)$700 million of $6 billion (12%)
Industrial Decarbonization:

Industrial decarbonization projects represented 12 percent of round one and 13 percent of round two awards. Multiple sectors received awards in both rounds. Recipients will deploy a range of emissions-reducing technologies, including heat pumps, electric boilers, thermal storage, low-carbon fuels, feedstocks, and energy sources. Both rounds experienced outsized demand from industry.

Looking Ahead

The next four years are significant, as claiming the 48C tax credit can take up to four years and depends on meeting the following milestones.

  • First, the allocated projects must meet the certification requirements within two years of receiving an allocation letter. After the certification process, project information will be made public, although projects can self-disclose sooner.  
  • Then, projects must meet the placed-in-service requirements within an additional two years.
  • If the project is placed in service within the required two-year period and DOE has been notified, the taxpayer may claim the 48C credit on the income tax return for the taxable year in which the project was placed in service.

The Initiative supports investments such as the 48C tax credit because they catalyze substantial private capital and provide critical support to US industry. These types of programs ensure that US manufacturing remains innovative, competitive, and a reliable source of well-paying jobs, all while revitalizing towns and cities across the country. The Initiative looks forward to collaborating with Congress to develop additional investment opportunities and policy innovations that further support American industrial advancements.

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Senior Program Coordinator - Carbon Management, GPI

Carrie Danner joined the Great Plains Institute in 2023 and serves as the operations coordinator for the Carbon Management team. In her work, she supports all projects within the program to elevate operations, specifically in the grant making and event planning spaces. Carrie earned a bachelor’s degree from Knox College in environmental studies. Prior to joining GPI, she supported programs at the Conservation Corps of Minnesota & Iowa as their member experience administrator.

Carbon Management Program Associate, GPI

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Jill Syvrud, Senior Program Manager, Carbon Management, GPI

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