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Treasury to Issue Final Guidance for IRA Provisions

The Treasury Department is gearing up to publish new guidance on two key provisions in the Inflation Reduction Act (POLITICO Pro, subscription).  

What’s going on: Deputy Treasury Secretary Wally Adeyemo said last week at a POLITICO energy event that his “department would soon issue finalized guidance for prevailing wage and apprenticeship requirements under the climate law that if met would increase the value of the underlying credit fivefold. In addition, the department is poised to issue a proposed rulemaking for tax credits for electric vehicle charging infrastructure.”

  • The department has already issued proposed guidance on prevailing wage and apprenticeship incentives and given initial eligibility for the refueling credit, but if it does not finalize the rules soon, it risks “efforts to undo them” by some members of Congress.

Direct pay: Treasury recently finalized rules for a direct-pay mechanism that allows entities to receive tax credit payments directly rather than rely on traditional tax equity financing by large banks, as well as rules allowing tax credits to be transferred.

  • The latter is a “key mechanism that is helping to reshape financing structures for clean energy projects.”
  • So far, about 60,000 projects have applied to receive direct pay or transferability options under the IRA.
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