We’re excited to announce that “Energy Community” and “Low-Income Community or Tribal Community" investment tax credit “adders” are now available in Station A’s Portfolio Evaluation tool. This new feature allows property owners to see which sites are eligible in their portfolio. Each place-based incentive bonus carries a 10% step-up onto the normal 30% investment tax credit (ITC) which can boost the eligible federal credit to 50% of the project value. This significant bonus can change the financials enough to tip a project into financial feasibility.
The new “adders” can be viewed alongside the rest of our portfolio analysis metrics, including likely payback period, IRR, and energy savings. This powerful dataset makes Station A Portfolios the simplest way to determine which sites may be ideal for clean energy deployment.
In 2022, Congress passed the Inflation Reduction Act, which contained many measures aimed at jump-starting the deployment of renewable energy. Through this legislation there was a shift to bring back the 30% threshold for Investment Tax Credit (ITC) eligibility for every project and create new bonuses based on geographic or categoric needs.
However, there are a few lesser-known “adders” on top of that 30%, and it’s even possible to get 70% off the total cost of the system!
These “adders” are:
- 10% if the project is located in an ‘Energy Community’
- 10% if the project is located on 'Tribal Community' (i.e. 'Indian Land') or in a ‘Low Income Community’
- 20% if the site is a 'Qualified Low-Income Residential Building Project or Economic Benefit Project' (but only 10% additional if located on tribal land or in a ‘Low Income Community’)
- 10% if the project meets domestic content minimums
The former two are place-based - we can use our technology platform to verify whether or not any address provided to us might qualify for the extra “adders”. The former two are more complicated; achieving domestic content minimums, for instance, is a possible requirement you can specify when soliciting bids for your site on our platform. Thus, we can help you achieve both types of adders, but via our platform we can tell you today whether the location of any site in your portfolio qualifies for the place-based "adders".
Why take action today?
One consideration that most folks don’t know about these programs: there is actually a cap on the amount of solar that can take advantage of some of these tax credits, which is allocated first-come, first served. Starting in October of 2023, for instance, here was the allocation for the “Low income Communities or Tribal Community” tax credits, shown below as category 1 and 2:
|Category 1: Located in a Low-Income Community
|Category 2: Located in Tribal Community
|Category 3: Qualified Low-Income Residential Building Project
|Category 4: Qualified Low-Income Economic Benefit Project
Allocation caps for Low-Income and Tribal Community in 2023. (US DOE)
We expect that similar allocations for 2024 are likely, although it is not possible to determine this in advance.
According to the guidance, only 210 MW of the category 1 cap is available for non-residential sites. Therefore, we recommend that you prepare and apply for a site as early as possible to secure your 10% tax credit.
Speak with us today to see if your project location can capitalize on these incentives in 2024 - we're happy to help validate the prospects for any given location and talk about what timelines are feasible for your site.
Station A’s Platform
At Station A, we are helping to decarbonize the world, starting with Commercial and Industrial buildings. We offer a no-cost portfolio analysis tool to help property owners determine which of the sites in their portfolio might financially pencil for solar onsite, and we run a marketplace where these property owners can request bids from multiple solar developers to find the right fit for their site.
Submit your portfolio today to see if you qualify for these new "adders". One of our experienced team members will reach out to you with the next steps. Station A Portfolios are free for any property owner, including you!