Alliance Urges IRS to Provide Tax Credit for Waste Heat to Power

The Alliance for Industrial Efficiency joined the Heat is Power Association and 22 other businesses and industrial energy-efficiency advocates in comments to the Internal Revenue Service (IRS) urging the agency to expand the existing clean-energy tax credit to include waste heat to power (WHP). Specifically, our letter requested that the Treasury and IRS clarify the definition of CHP property in Sec. 48(c)(3) to include both “topping” and “bottoming” cycle CHP. The CHP definition in the existing tax code limits the 10 percent investment tax credit (ITC) to certain CHP projects known as topping cycle cogeneration. Congress, the DOE and the EPA all formally recognize bottoming cycle cogeneration (also known as WHP) in law, regulation and published reports. The failure to include WHP in Section 48 removes an important financial tool to support deployment of this clean-energy technology, making it challenging for these fuel-free, emission-free systems to compete in the marketplace.