The Treasury Department has initiated initial Inflation Reduction Act guidance regarding labor standards the agency noted firms must meet to qualify for enhanced clean energy and climate tax incentives.
“The historic Inflation Reduction Act that President Biden signed into law earlier this year puts in place tax incentives across the energy sector that will drive renewable energy investment and economic growth while ensuring the jobs created from this investment and growth are good-paying ones, with strong labor protections,” Treasury Secretary Janet L. Yellen said. “Workers should benefit from the clean energy economy they’re helping build. The guidance provides firms greater clarity on how to meet the labor standards embedded in the bill to maximize the available tax credits.”
The action represents a key first step toward ensuring the Inflation Reduction Act supports well-paying jobs in the clean energy industry while expanding workforce training pathways into those jobs.
The prevailing wage and apprenticeship requirements apply to tax incentives that include Advanced Energy Project Credit; Alternative Fuel Refueling Property Credit; Credit for Carbon Oxide Sequestration; and Clean Fuel Production Credit.
Additionally, the Treasury Department noted the prevailing wage requirements also apply to the New Energy Efficient Home Credit and Zero-Emission Nuclear Power Production Credit tax incentives.
The guidance published in the Federal Register starts a 60-day clock translating to requirements applying to qualifying facilities, projects, property, or equipment for which construction begins on or after Jan. 29, 2023, per the Treasury Department.