April 2, 2024 — Earlier this month, the Combined Heat and Power Alliance submitted comments to the Internal Revenue Service on Notice 2022-49, outlining a how and why natural gas-fired CHP should qualify for the Secs. 45Y and 48E tax credits, which become effective on January 1, 2025.
The CHP Alliance detailed a methodology by which CHP units will qualify based on the emissions that they displace compared to grid generation. Natural gas-powered CHP can help decarbonize all regions of the U.S. into the 2040s and many regions of the US well beyond 2050. Deployment of these systems should continue to be incentivized, as they will aid in the U.S. reducing carbon emissions from the electric power sector by 75% compared to 2022 levels, as is the goal of the Secs. 45Y and 48E credits.
Read the CHPA’s Full Comment to the Treasury Department on Notice 2022-49 here.