IRS lays out labor rules for clean-energy tax credits

The IRS this morning published long-awaited guidance on how clean-energy developers can qualify for lucrative wage and apprenticeship tax credits.

Why it matters: The Inflation Reduction Act ties certain incentives to wage and other requirements. The industry has been calling on Treasury to clarify those measures for months.

What's happening: The guidance would seem relatively straightforward:

• Energy companies have to pay their workers the federal prevailing wage for their area, as set by the Labor Department.
• They also have to follow Labor Department rules on apprenticeship programs, such as the type and amount of work that apprentices can perform and whether the apprentices are recruited from accredited programs.

The intrigue: Clean-energy trade groups like American Clean Power said yesterday that the picture is still muddled.

• One area that remains unclear: how to define "energy communities" that have historically relied on the fossil fuel sector.
• The climate bill promises bonus incentives for projects built in such communities. Treasury has so far offered little insight on how it will identify those areas.
• "While ACP and our members are supportive of the IRA’s labor requirements, the guidance issued today provides little clarity on the implementation of these provisions," ACP's interim CEO, JC Sandberg, said in a statement.