The federal Treasury Department has released a long-awaited guidance detailing what companies must do in order to qualify for clean energy tax credits. Those credits are being made available via the Inflation Reduction Act, which was signed into law late this summer by President Biden and is devoted to, among other things, domestic energy production and clean energy investment. Altogether, the legislation invests upwards of $369 billion on clean energy initiatives, with some $270 billion of that figure made up of tax incentives. In a statement, Treasury Secretary Janet Yellen said the guidance is designed to give to companies “greater clarity on how to meet the labor standards embedded” in the Inflation Reduction Act in order to “maximize the available tax credits.” The legislation, which is said to represent the largest investment in climate change issues in U.S. history, allows for a tax credit to be applied to projects that have been launched on or after next January 29. In order to qualify for a credit, companies are required to pay their workers a prevailing wage as defined by their job classification and geographical area. In a press release, the Treasury Department said that if there is no prevailing wage standard as defined by the classification of the job or geographical area, companies should contact the Wage and Hour Division of the Labor Department for instructions. The Treasury Department’s guidance has been criticized as being somewhat murky by some members of the construction industry. Ben Brubeck, vice president of regulatory, labor and state affairs for the Associated Builders and Contractors, said the lack of a clear guidance may “prevent stakeholders from taking full advantage of the tax credits and will slowdown clean energy infrastructure development.” Yellen, however, has said that the new guidance does indeed provide “initial high-level clarity around these important labor standards.” The Treasury Department is expected to issue additional guidance regarding clean energy tax credits in the months to come. By Garry Boulard
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