IRS Offers Flexibility for Developers in Energy Labor Rules (1)

The IRS and Treasury Department are easing penalty procedures for developers and investors who don’t meet the labor rules for the clean energy tax credits on their projects.

The Biden administration’s Inflation Reduction Act ties the amount of some tax credits to labor standards, where developers will have to pay laborers and mechanics a prevailing wage and use trained apprentices to complete a certain percentage of the project. Meeting the requirements, which took effect Jan. 29, will increase some of the credit amounts in the law to 30% from 6%—a fundamental difference for project financing, some in the industry have ...