The US Department of the Treasury just released its guidance on the labor requirements that must be fulfilled in order to maintain the credit for the full amount for clean energy and infrastructure projects under the Inflation Reduction Act of 2022 (Act). This includes renewable energy, energy storage, hydrogen, biogas, carbon capture and electric vehicle charging infrastructure. The guidance covers the Act’s two fundamental critical labor requirements— providing prevailing wages and employing a certain amount of registered apprentices—that project developers must meet for clean energy projects to maintain the credit for the full amount of 30% for the investment tax credit (ITC) or the full amount of the production tax credit (PTC).
As detailed further below, depending upon a project’s development status, such guidance either triggers a mad dash to begin construction by January 28, 2023, in order to be exempted from such requirements or continues to leave developers a bit in the dark on operational and administrative requirements for projects beginning construction after January 28, 2023 (as actual wages are not yet published), each assuming formal guidance is published in the Federal Register on November 30.