The release of highly-anticipated eligibility requirements for a bonus credit in the Inflation Reduction Act that incentivizes clean energy development in so-called energy communities.

The credit of up to 10% is an adder to the Investment Tax Credit or Production Tax Credit for clean energy or energy storage project development.

The Internal Revenue Service issued a notice on April 4 that defined three categories of energy communities: 1) a brownfield site, 2) a community that has or had at least 0.17% direct fossil fuel employment or at least 25% local tax revenues from fossil fuels and an unemployment rate at or ave the national average, 3) a community in which a coal mine closed after Dec. 31, 2009.

Encore Renewable Energy CEO Chad Farrell joined Episode 22 of the Factor This! podcast to talk about brownfield and energy community clean energy development and how the Inflation Reduction Act is impacting the bankability of these tricky projects.

In addition to the guidance from the IRS, the Department of Energy released a new tool to help stakeholders identify opportunities for redevelopment of energy communities and shuttered coal plants.

The tool also outlines key infrastructure characteristics, including transmission lines, ports, substations, and railroads.

Abigail Ross Hopper, CEO of the Solar Energy Industries Association trade group, commended the administration for including "clear references to government data for qualifying areas, a 50% rule for projects to be located in an energy community, and a commonsense rule for adjoining census tracts" in the energy community framework.

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