With the push for sustainable energy on the rise, there’s never been a better time for developers to explore renewable projects. The Inflation Reduction Act (IRA) provides a unique opportunity through the Energy Community Tax Credit Bonus, offering additional tax incentives for qualifying rural energy developments, particularly solar and wind projects. In this post, we’ll outline which types of properties qualify for this tax credit bonus, explain how it works, and show how AcreValue’s map layers can help you identify ideal locations.
What is the IRA Energy Community Tax Credit Bonus?
The IRA Energy Community Tax Credit Bonus is a federal incentive designed to encourage energy projects in specific areas that will benefit from the economic activity. The Energy Community Tax Credit Bonus applies a bonus of up to 10% (for production tax credits) or 10 percentage points (for investment tax credits) for projects, facilities, and technologies located in energy communities. This bonus applies to various projects, including solar, wind, and other renewable energy sources.
Qualifying for the Bonus
To qualify, energy projects must be located within designated "Energy Communities." These communities often include areas with historical ties to the fossil fuel industry.
What Types of Properties Qualify?
To take advantage of the IRA Energy Community Tax Credit Bonus, developers need to locate their projects within the specified zones. Qualified properties typically fall into one of the following energy community categories defined in the IRA:
- Fossil Fuel Employment: This includes areas that meet both the Fossil Fuel Employment (FEE) threshold and the unemployment rate requirement.
- Coal Communities: Regions (or adjoining census tracts) where a coal mine or a coal-fired electric generating unit were retired recently may qualify. Coal mines must have been closed after 1999 to qualify, and coal-fired electric generating units must have been closed after 2009.
- Brownfield Sites: These are previously developed sites, often former industrial or commercial land, which can be repurposed for renewable energy projects.
How AcreValue Can Help You Find Qualifying Properties
You can find qualified area maps for Fossil Fuel Employment, Coal Communities, and Brownfield Sites on AcreValue. To activate those maps, follow these steps:
- Log in to AcreValue: Ensure you are logged into your AcreValue account.
- Navigate to the map: Go to the map section of AcreValue.
- Open Map Layers menu: Locate the Map Layers menu at the top left corner of the map.
- Select Crop Cover: Within the Map Layers menu, find the option to display the Land Cover layer on the map.
- Explore: Pan, zoom, and explore the map to see Energy Community Tax Credit areas across your area of interest.
The Energy Community Tax Credit map layer is available to users with a Premium or Enterprise subscription. Purchase a subscription here: Purchase AcreValue Premium.
Use the Energy Community Tax Credit Maps with Other AcreValue Tools
Try using the Energy Community Tax Credit Maps with other AcreValue tools, such as:
- Energy Infrastructure Layers: Developers targeting areas for renewable energy projects can use the Energy Infrastructure map layers, like transmission lines and substations, in combination with Energy Community Tax Credit Maps to identify optimal properties with open land and nearby infrastructure.
- Land Cover Maps: Developers can cross-reference land cover maps with records of local land ownership to identify top growers of particular crops.
- Absentee Owner Filter: For those targeting absentee landowners, combine this filter with Energy Community Tax Credit map layers to sort owners into different priorities based on their location.
Take Advantage of the Current Renewable Energy Landscape
With federal tax credits and grants available for energy development in rural areas, now is the time to explore renewable energy projects. AcreValue’s advanced tools make it easier than ever to identify properties that not only fit your project’s development budget and goals.
Ready to get started? Purchase a subscription or contact AcreValue Sales about an Enterprise subscription.