On May 31, 2023, the Internal Revenue Service (“IRS”) released Notice 2023-44 (the “Notice”), which provides additional information regarding the Qualifying Advanced Energy Project Credit Allocation Program under § 48C (e) of the Internal Revenue Code (the “Program”). Section 48C was amended in August 2022 by the Inflation Reduction Act (“IRA”)[1] to allocate $10 billion in credits for these qualifying advanced energy projects. The purpose of the Program is to “expand U.S. manufacturing capacity and quality jobs for clean energy technologies (including production and recycling), to reduce greenhouse gas emissions in the U.S. industrial sector, and to secure domestic supply chains for critical materials (including specified critical minerals) that serve as inputs for clean energy technology production.”[2] 

The IRS anticipates at least 2 rounds of allocation, the first being decided by March 31, 2024. At least $4 billion of the §48C credits are to be allocated to Energy Communities Census Tracts; however, the IRS does not anticipate allocating the entire $4 billion in the first round.

Previously, the IRS released Notice 2023-18 on February 13, 2023. to provide initial guidance for the implementation of the Program. This original guidance provided that the allowable credits can amount to 30 percent of the investment, with certification of prevailing wage and apprenticeship requirements. If these requirements have not been met, the taxpayer is still eligible for a credit; however, such credit will be one-fifth of the full credit amount. The original guidance also provided that a taxpayer may not receive Program tax credits for any investment that is also claimed under §§48, 48A, 48B, 48E, 45Q, or 45V.

With publication of the Notice, the IRS provides additional guidance to the Program, as Notice 2023-18 left many open questions. Firstly, the Notice now defines a “qualifying advanced energy project.” The three categories of qualifying advanced energy projects are: (1) clean energy manufacturing and recycling projects; (2) greenhouse gas emission reduction projects; and (3) critical material projects. Appendix A of the Notice also provides examples of eligible and ineligible properties and projects within each category.

Secondly, the Notice provides the Program’s application timeline and process, as taxpayers must apply to receive the allowable credit. To start, an applicant must submit a concept paper that describes the proposed project. The submission period for concept papers began on May 31, 2023, and ends no later than July 31, 2023, by noon. After electronic submission, the DOE will review the concept paper and send letters of encouragement or discouragement. Applicants may submit a §48C(e) application regardless of what letter they received; however, recipients of discouragement letters are at risk of not receiving a DOE recommendation to the IRS for allocation. The Notice does not provide a specific deadline for the §48C(e) application other than “Fall 2023 – Winter 2023/2024,” but this may be clarified in future guidance.

After the taxpayer electronically submits the §48C(e) application, the DOE will perform an eligibility review. This review is to confirm the application fulfilled all the requirements. Next, the DOE performs a technical review based on the following criteria: (1) commercial viability, (2) greenhouse gas emissions impacts, (3) strengthening U.S. supply chains and domestic manufacturing for a net-zero economy, and (4) workforce and community engagement. The Notice provides further specifications on application content, formatting, and technical criteria for all application materials and for each of the different project categories. Based on its technical review, the DOE will determine which projects justify recommendation and will rank each of the projects for priority of recommendation.

The IRS will then determine which projects it will accept based on the ranking provided by DOE. The IRS will not consider an application without DOE recommendation. Applicants of an accepted project will receive an “Allocation Letter.” After allocation, the taxpayer has two years to certify their project to show the project met the application claims through submission to the DOE and the IRS. The IRS will then issue a “Certification Letter” to the taxpayer, after which the taxpayer has two years to notify the DOE it has placed its project in service. Failure to comply with these deadlines can result in forfeiture of the allocation.

Lastly, the Notice provides guidance on the following: (1) the definition of “facility” for the purposes of §48C and §45X; (2) the procedure on how to inform the DOE and IRS of significant changes; (3) clarification that the disclosure of information regarding the allocation must be consented to by the recipient; (4) the procedure regarding significant changes in project plans; (5) clarification that projects placed in service prior to allocation are not eligible for this program; and (6) information regarding Energy Communities Census Tracts, including a list of examples, in the newly added Appendix C.

Help with Renewable Energy Projects

If you are in the process of constructing, developing, or permitting a renewable energy project, fuel cell or energy storage facility, combined heat and power or geothermal system, or similar clean energy system, or any greenhouse gas emissions reductions projects, contact us to discuss whether your project may be eligible for these incentives and how to make an application with DOE. Please contact Harris Beach’s New York energy attorneys Michelle K. Piasecki, at (518) 701-2741 and mpiasecki@harrisbeach.com; or Pietra G. Zaffram, at (716) 200-5112 and pzaffram@harrisbeach.com; or the Harris Beach attorney with whom you most frequently work.

This alert is not a substitute for advice of counsel on specific legal issues.

Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as Washington D.C., New Haven, Connecticut and Newark, New Jersey.


[1] Inflation Reduction Act, Pub. L. No. 117-169, §13501, 136 Stat. 1818 (2022).

[2] IRS Notice 2023-18.