Sec. 5012. Clean energy investment credit
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Subpart E of part IV of subchapter A of chapter 1 is amended by inserting after section 48D the following new section: For purposes of section 46, the clean energy investment credit for any taxable year is an amount equal to the sum of— the clean energy percentage of the qualified investment for such taxable year with respect to any qualified facility, plus 30 percent of the qualified investment for such taxable year with respect to qualified carbon capture and sequestration equipment, plus 30 percent of the qualified investment for such taxable year with respect to energy storage property.
Except as provided in clause (ii), the clean energy percentage is 30 percent. The clean energy percentage shall be reduced (but not below zero) by an amount which bears the same ratio to 30 percent as the anticipated greenhouse gas emissions rate for the qualified facility bears to 372 grams of CO 2 e per KWh. If any amount determined under subparagraph (A)(ii) is not a multiple of 1 percent, such amount shall be rounded to the nearest multiple of 1 percent. The clean energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)).
For purposes of subsection (a)(1)(A), the qualified investment with respect to any qualified facility for any taxable year is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of a qualified facility. The term qualified property means property— which is— tangible personal property, or other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified facility, with respect to which depreciation (or amortization in lieu of depreciation) is allowable, which is constructed, reconstructed, erected, or acquired by the taxpayer, and the original use of which commences with the taxpayer.
The term qualified facility has the same meaning given such term by section 45S(e)(3) (without regard to subparagraphs
(B)and
(D)thereof). Such term shall not include any facility for which a renewable electricity production credit under section 45 or an energy credit determined under section 48 is allowed under section 38 for the taxable year or any prior taxable year. For purposes of subsection (a)(1)(B), the qualified investment with respect to qualified carbon capture and sequestration equipment for any taxable year is the basis of any qualified carbon capture and sequestration equipment placed in service by the taxpayer during such taxable year. The term qualified carbon capture and sequestration equipment means property— installed in a facility placed in service before January 1, 2018, which produces electricity, which results in at least a 50 percent reduction in the carbon dioxide emissions rate at the facility, as compared to such rate before installation of such equipment, through the capture and disposal of qualified carbon dioxide (as defined in paragraph (3)(A)), with respect to which depreciation is allowable, which is constructed, reconstructed, erected, or acquired by the taxpayer, and the original use of which commences with the taxpayer. The term qualified carbon dioxide means carbon dioxide captured from an industrial source which— would otherwise be released into the atmosphere as industrial emission of greenhouse gas, is measured at the source of capture and verified at the point of disposal or injection, is disposed of by the taxpayer in secure geological storage, and is captured and disposed of within the United States (within the meaning of section 638(1)) or a possession of the United States (within the meaning of section 638(2)). The term secure geological storage has the same meaning given to such term under section 45Q(d)(2). For purposes of subsection (a)(1)(C), the qualified investment with respect to energy storage property for any taxable year is the basis of any energy storage property placed in service by the taxpayer during such taxable year. The term energy storage property means property— installed at or near a facility which produces electricity, which receives, stores, and delivers electricity or energy for conversion to electricity which is sold by the taxpayer to an unrelated person (or, in the case of a facility which is equipped with a metering device which is owned and operated by an unrelated person, sold or consumed by the taxpayer), which may include— hydroelectric pumped storage, compressed air energy storage, regenerative fuel cells, batteries, superconducting magnetic energy storage, thermal energy storage systems, fuel cells (as defined in section 48(c)(1)), any other relevant technology identified by the Secretary (in consultation with the Secretary of Energy), and any combination of the properties described in clauses
(i)through (viii), with respect to which depreciation is allowable, which is constructed, reconstructed, erected, or acquired by the taxpayer, the original use of which commences with the taxpayer, and which is placed in service after December 31, 2017. For purposes of this section, the term greenhouse gas emissions rate has the same meaning given such term under subsection
(b)of section 45S. The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall, by regulation, establish safe-harbor greenhouse gas emissions rates for types or categories of qualified property which are part of a qualified facility, which a taxpayer may elect to use for purposes of this section. In establishing the safe-harbor greenhouse gas emissions rates for qualified property, the Secretary may round such rates to the nearest multiple of 37.2 grams of CO 2 e per KWh (or, in the case of a greenhouse gas emissions rate which is less than 18.6 grams of CO 2 e per KWh, by rounding such rate to zero). Rules similar to the rules of subsection (c)(4) and
(d)of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a). Subject to paragraph (3), if the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from electrical production in the United States are equal to or less than 72 percent of the annual greenhouse gas emissions from electrical production in the United States for calendar year 2005, the amount of the clean energy investment credit under subsection
(a)for any qualified facility, qualified carbon capture and sequestration equipment, or energy storage property placed in service during a calendar year described in paragraph
(2)shall be equal to the product of— the amount of the credit determined under subsection
(a)without regard to this subsection, multiplied by the phase-out percentage under paragraph (2). The phase-out percentage under this paragraph is equal to— for a facility or property placed in service during the first calendar year following the calendar year in which the determination described in paragraph
(1)is made, 75 percent, for a facility or property placed in service during the second calendar year following such determination year, 50 percent, for a facility or property placed in service during the third calendar year following such determination year, 25 percent, and for a facility or property placed in service during any calendar year subsequent to the year described in subparagraph (C), 0 percent. If the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from electrical production in the United States for each year before calendar year 2026 are greater than the percentage specified in paragraph (1), then the determination described in such paragraph shall be deemed to have been made for calendar year 2025. In this section: 2 e per KW h The term CO has the same meaning given such term under section 45S(e)(1). 2 e per KWh The term greenhouse gas has the same meaning given such term under section 45S(e)(2). For purposes of section 50, if the Administrator of the Environmental Protection Agency determines that— the greenhouse gas emissions rate for a qualified facility is significantly higher than the anticipated greenhouse gas emissions rate claimed by the taxpayer for purposes of the clean energy investment credit under this section, or with respect to any qualified carbon capture and sequestration equipment installed in a facility, the carbon dioxide emissions from such facility cease to be captured or disposed of in a manner consistent with the requirements of subsection (c), the facility or equipment shall cease to be investment credit property in the taxable year in which the determination is made. Not later than January 1, 2017, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall issue final guidance regarding implementation of this section, including calculation of greenhouse gas emission rates for qualified facilities and determination of clean energy investment credits under this section. . Section 46 is amended by inserting a comma at the end of paragraph (4), by striking “and” at the end of paragraph (5), by striking the period at the end of paragraph
(6)and inserting “, and”, and by adding at the end the following new paragraph: the clean energy investment credit. . Section 49(a)(1)(C) is amended by striking “and” at the end of clause (v), by striking the period at the end of clause
(vi)and inserting a comma, and by adding at the end the following new clauses: the basis of any qualified property which is part of a qualified facility under section 48E, the basis of any qualified carbon capture and sequestration equipment under section 48E, and the basis of any energy storage property under section 48E. . Section 50(a)(2)(E) is amended by inserting or 48E(e) after section 48(b) . The table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 48D the following new item: 48E. Clean energy investment credit. . The amendments made by this subsection shall apply to property placed in service after December 31, 2017, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990). Section 25D is amended to read as follows: In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of— the clean energy percentage of the expenditures made by the taxpayer for qualified property which is— installed in a dwelling unit which is located in the United States and used as a residence by the taxpayer, and placed in service during such taxable year, plus 30 percent of the expenditures made by the taxpayer for energy storage property which is— installed in a dwelling unit which is located in the United States and used as a residence by the taxpayer, and placed in service during such taxable year. Except as provided in clause (ii), the clean energy percentage is 30 percent. The clean energy percentage shall be reduced (but not below zero) by an amount which bears the same ratio to 30 percent as the anticipated greenhouse gas emissions rate for the qualified property bears to 372 grams of CO 2 e per KWh. If any amount determined under subparagraph (A)(ii) is not a multiple of 1 percent, such amount shall be rounded to the nearest multiple of 1 percent. For purposes of this section, the terms greenhouse gas emissions rate and CO have the same meanings given such terms under subsections
(b)and (e)(1) of section 45S, respectively. 2 e per KWh The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall, by regulation, establish safe-harbor greenhouse gas emissions rates for types or categories of qualified property which are installed in a dwelling unit, which a taxpayer may elect to use for purposes of this section. In establishing the safe-harbor greenhouse gas emissions rates for qualified property, the Secretary may round such rates to the nearest multiple of 37.2 grams of CO 2 e per KWh (or, in the case of a greenhouse gas emissions rate which is less than 18.6 grams of CO 2 e per KWh, by rounding such rate to zero). The term qualified property means property— which is tangible personal property, which is used for the generation of electricity, which is constructed, reconstructed, erected, or acquired by the taxpayer, the original use of which commences with the taxpayer, and which is originally placed in service after December 31, 2017. The term energy storage property means property which receives, stores, and delivers electricity or energy for conversion to electricity which is consumed by the taxpayer, which may include— batteries, thermal energy storage systems, fuel cells, any other relevant technology identified by the Secretary (in consultation with the Secretary of Energy), and any combination of the properties described in paragraphs
(1)through (4). If the credit allowable under subsection
(a)exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection
(a)for such succeeding taxable year. Subject to paragraph (3), if the Secretary determines that the annual greenhouse gas emissions from electrical production in the United States are equal to or less than the percentage specified in section 48E(g), the amount of the credit allowable under subsection
(a)for any qualified property or energy storage property placed in service during a calendar year described in paragraph
(2)shall be equal to the product of— the amount of the credit determined under subsection
(a)without regard to this subsection, multiplied by the phase-out percentage under paragraph (2). The phase-out percentage under this paragraph is equal to— for property placed in service during the first calendar year following the calendar year in which the determination described in paragraph
(1)is made, 75 percent, for property placed in service during the second calendar year following such determination year, 50 percent, for property placed in service during the third calendar year following such determination year, 25 percent, and for property placed in service during any calendar year subsequent to the year described in subparagraph (C), 0 percent. If the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from electrical production in the United States for each year before calendar year 2026 are greater than the percentage specified in section 48E(g), then the determination described in paragraph
(1)shall be deemed to have been made for calendar year 2025. For purposes of this section: Expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the qualified property or energy storage property and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section. In the case of an individual who is a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), such individual shall be treated as having made his tenant-stockholder's proportionate share (as defined in section 216(b)(3)) of any expenditures of such corporation. In the case of an individual who is a member of a condominium management association with respect to a condominium which the individual owns, such individual shall be treated as having made the individual's proportionate share of any expenditures of such association. For purposes of this paragraph, the term condominium management association means an organization which meets the requirements of paragraph
(1)of section 528(c) (other than subparagraph
(E)thereof) with respect to a condominium project substantially all of the units of which are used as residences. If less than 80 percent of the use of a property is for nonbusiness purposes, only that portion of the expenditures for such property which is properly allocable to use for nonbusiness purposes shall be taken into account. For purposes of this subtitle, if a credit is allowed under this section for any expenditures with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditures shall be reduced by the amount of the credit so allowed. Not later than January 1, 2017, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall issue final guidance regarding implementation of this section, including calculation of greenhouse gas emission rates for qualified property and determination of residential clean energy property credits under this section. . Paragraph
(1)of section 45(d) is amended by striking Such term and all that follows through the period and inserting the following: Such term shall not include any facility with respect to which any expenditures for qualified property (as defined in subsection
(b)of section 25D) which uses wind to produce electricity is taken into account in determining the credit under such section. . Paragraph
(34)of section 1016(a) is amended by striking section 25D(f) and inserting section 25D(h) . The item relating to section 25D in the table of contents for subpart A of part IV of subchapter A of chapter 1 is amended to read as follows: Sec. 25D. Clean residential energy credit. . The amendments made by this section shall apply to property placed in service after December 31, 2017.