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Low-Income Communities Bonus Adder was offered by the Federal Government via The Inflation Reduction Act (IRA). This will provide a 10% bonus added to the already available 30% Investment Tax Credit (ITC). This bonus will benefit homeowners, businesses and nonprofits in low-income/Indian communities throughout the whole country.

At YellowLite we hosted a webinar on October 25th to talk about this program where we discussed the categories of installations that are eligible for this program and what is the process to apply.

Watch the full webinar below:

 

Presentation Link: Webinar Presentation

Few important points from the webinar are listed below to briefly describe what we discussed.

What kind of energy equipment is eligible?

  • Solar and Wind Projects under 5 MW AC 
  • Battery Storage “In Connection With” Other Eligible Property (50%+) Safe Harbor. This means that the power rating of the energy storage technology (in kW) is less than 2 times the capacity rating of the connected energy facility i.e. 100kW PV and battery < 200kW. 

Who Qualifies for low-income bonus adder?

The low-income bonus adder is available for four categories of projects.

CATEGORY

PROJECT TYPE

BONUS ADDER

MW AVAILABLE IN 2023 PROGRAM

1

Located in a Low-Income Community

10%

700MW

2

Located on Indian Land

10%

200MW

3

Qualified Low-Income Residential Building Project

20%

700MW

4

Qualified Low-Income Economic Benefit Project (providing at least 50% of facility’s total output to qualifying Low-Income households)

20%

700MW


The total capacity limitation for all categories (per year)

= 1.8GW

 

You can refer to the presentation or the full webinar to see the breakdown of all the categories. To check which communities come under the low income category you can refer to this Map by DOE. If your residence is within the green area on the map, you instantly qualify for this extra 10%. It's that simple!

What are the application requirements?

  • Applicants may only submit one application per facility per the allocation year.
    YellowLite and their Representative are able to guide you through this process
  • The applicant’s application and any required attestations must be submitted under penalties of perjury and dated by the applicant.

What Happens After the Application is Submitted?

  • The First 30 days from October 19th- Priority goes to nonprofit organizations.
  • If oversubscribed in any category, lottery commences
  • Rolling application review after first 30 days for homeowners
  • If you make a mistake, DOE may contact you (21 business day “cure period”)
  • DOE makes recommendation to IRS, IRS performs notification
  • If not selected, applications may reapply if still eligible

Send Applications Now!

The DOE portal is already up and they are receiving applications. Almost 100,000 applications are expected in 2023 and the applications that will be received within 30 days will be given priority by the Department of Energy (DOE). Each individual completing an application on behalf of their organization will need a Login.gov account in order to complete an application. 

 

*Disclaimer: The information in this blog post does not constitute legal or tax advice and should not be relied upon for any purpose. Please consult your legal counsel and tax advisor. 

 

References for further reading and information: 

https://public-inspection.federalregister.gov/2023-17078.pdf

https://www.irs.gov/pub/irs-drop/rp-23-27.pdf

https://experience.arcgis.com/experience/12227d891a4d471497ac13f60fffd822

https://www.energy.gov/sites/default/files/2023-08/Category%203%20Eligible%20Housing%20Programs.pdf




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