26 U.S.C. § 45Y - Clean electricity production credit

Cite as26 U.S.C. § 45Y

(a) Amount of credit

(1) In general

For purposes of section 38, the clean electricity production credit for any taxable year is an amount equal to the product of-

(A) the kilowatt hours of electricity-

(i) produced by the taxpayer at a qualified facility, and

(ii)

(I) sold by the taxpayer to an unrelated person during the taxable year, or

(II) in the case of a qualified facility which is equipped with a metering device which is owned and operated by an unrelated person, sold, consumed, or stored by the taxpayer during the taxable year, multiplied by

(B) the applicable amount with respect to such qualified facility.

(2) Applicable amount

(A) Base amount

Subject to subsection (g)(7), in the case of any qualified facility which is not described in clause (i) or (ii) of subparagraph (B) and does not satisfy the requirements described in clause (iii) of such subparagraph, the applicable amount shall be 0.3 cents.

(B) Alternative amount

Subject to subsection (g)(7), in the case of any qualified facility-

(i) with a maximum net output of less than 1 megawatt (as measured in alternating current),

(ii) the construction of which begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (9) and (10) of subsection (g), or

(iii) which-

(I) satisfies the requirements under paragraph (9) of subsection (g), and

(II) with respect to the construction of such facility, satisfies the requirements under paragraph (10) of subsection (g),

the applicable amount shall be 1.5 cents.

(b) Qualified facility

(1) In general

(A) Definition

Subject to subparagraphs (B), (C), and (D), the term "qualified facility" means a facility owned by the taxpayer-

(i) which is used for the generation of electricity,

(ii) which is placed in service after December 31, 2024, and

(iii) for which the greenhouse gas emissions rate (as determined under paragraph (2)) is not greater than zero.

(B) 10-year production credit

For purposes of this section, a facility shall only be treated as a qualified facility during the 10-year period beginning on the date the facility was originally placed in service.

(C) Expansion of facility; incremental production

The term "qualified facility" shall include either of the following in connection with a facility described in subparagraph (A) (without regard to clause (ii) of such subparagraph) which was placed in service before January 1, 2025, but only to the extent of the increased amount of electricity produced at the facility by reason of the following:

(i) A new unit which is placed in service after December 31, 2024.

(ii) Any additions of capacity which are placed in service after December 31, 2024.

(D) Coordination with other credits

The term "qualified facility" shall not include any facility for which a credit determined under section 45, 45J, 45Q, 45U, 48, 48A, or 48E is allowed under section 38 for the taxable year or any prior taxable year.

(2) Greenhouse gas emissions rate

(A) In general

For purposes of this section, the term "greenhouse gas emissions rate" means the amount of greenhouse gases emitted into the atmosphere by a facility in the production of electricity, expressed as grams of CO2e per KWh.

(B) Fuel combustion and gasification

In the case of a facility which produces electricity through combustion or gasification, the greenhouse gas emissions rate for such facility shall be equal to the net rate of greenhouse gases emitted into the atmosphere by such facility (taking into account lifecycle greenhouse gas emissions, as described in section 211(o)(1)(H) of the Clean Air Act ( 42 U.S.C. 7545(o)(1)(H) )) in the production of electricity, expressed as grams of CO2e per KWh.

(C) Establishment of emissions rates for facilities

(i) Publishing emissions rates

The Secretary shall annually publish a table that sets forth the greenhouse gas emissions rates for types or categories of facilities, which a taxpayer shall use for purposes of this section.

(ii) Provisional emissions rate

In the case of any facility for which an emissions rate has not been established by the Secretary, a taxpayer which owns such facility may file a petition with the Secretary for determination of the emissions rate with respect to such facility.

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