US Treasury Secretary Janet Yellen tours the Ford Motor Company’s Rouge Electric Vehicle Center that builds the all-electric Ford F-150 Lightning with Linda Zhang,(R), chief engineer for the vehicle, before delivering an economic speech in Dearborn, Michigan, on September 8, 2022.
Jeff Kowalsky | AFP | Getty Images
The Treasury Department released guidelines Tuesday detailing recent wage and apprenticeship standards firms must meet to qualify for tax incentives under the Inflation Reduction Act.
“I would like to send a message to investors, developers, contractors taking a look at clean energy projects,” said Labor Secretary Marty Walsh. “I encourage them to make the most of all these opportunities. They’re greater than tax incentives, they’re powerful tools for constructing a talented workforce.”
The standards go into effect on Jan. 29, 60 days from the announcement.
“We felt it was critical to work quickly to offer initial high level clarity around these necessary labor standards,” said Treasury Secretary Janet Yellen. “You now have concrete guidance on methods to find those wage rates in order to comply to the Inflation Reduction Act’s requirements.”
The Inflation Reduction Act, which became law in August, allocated $369 billion toward addressing climate change through clean energy initiatives. Nearly all of the investment, around $270 billion, is thru direct tax incentives.
The administration on Tuesday further detailed steps needed for firms to qualify for the tax incentives. Firms need to pay staff the prevailing wage for his or her area and abide by rules for the usage of apprenticeship programs. The prevailing wage is decided by the Department of Labor and posted on its sam.gov website.
“The central component of this law is the strong labor standards put in place to be certain that the roles we’re creating is a component of our transition to a clean energy economy of fine paying, high-quality jobs, and that those job opportunities are broadly accessible,” Yellen said. “Employees should profit from the clean energy economy they’re helping to construct.”
The prevailing wage and apprenticeship requirements are needed for firms to receive the Advanced Energy Project Credit, the Alternative Fuel Refueling Property Credit, the Credit for Carbon Oxide Sequestration, the Clean Fuel Production Credit, the Credit for Production of Clean Hydrogen, the Energy Efficient Industrial Buildings Deduction, the Renewable Energy Production Tax Credit and the Renewable Energy Property Investment Tax Credit.
The prevailing wage stipulation can be required for the Latest Energy Efficient Home Credit and the Zero-Emission Nuclear Power Production Credit.
As a part of its guidance for receiving the credits, Treasury also outlined record-keeping requirements and the definition of when a project officially begins.