IRS updates energy community guidance for bonus credits


The IRS has issued guidance (Notice 2023-45 and Notice 2023-47) updating the rules and the mapping tool for determining whether an energy project is located in an “energy community” and will qualify for a 10% bonus energy credit under Sections 45 and 48.


Projects located in energy communities are generally eligible for an additional 10% investment tax credit (ITC) under Section 48 or a 10% increase in the rate for the production tax credit (PTC) under Section 45. There are three separate categories of qualifying energy communities:

  • “Brownfield” sites
  • “Statistical areas” meeting energy activity thresholds with unemployment above national averages
  • Census tracts (and adjoining census tracts) where a coal mine or coal-fired elective plant has closed


The IRS in Notice 2023-29 only identified the qualified statistical areas that satisfy the first prong of the requirements because it was waiting on new unemployment numbers. Notice 2023-47 includes an appendix specifying the actual list of qualifying areas that meet the full test, and the mapping tool has been updated to reflect them.


Notice 2023-45 updates a safe harbor for determining whether a Brownfield site qualifies as an energy community. A Brownfield site will qualify if it meets any of the following conditions:

  • The site was previously assessed by federal, state, territory or Indian tribal Brownfield resources as a Brownfield (the IRS notes that a list of these sites can be accessed from an EPA website and similar government webpages)
  • An “ASTM E1903 Phase II Environmental Site Assessment” has been completed and has confirmed the presence of an applicable hazardous substance, pollutant or contaminant
  • An “ASTM E1527 Phase I Environmental Site Assessment” has been completed and the project has a nameplate capacity of 5 megawatts or less


Under the new guidance, the phase I assessment in prong three must identify the presences or potential presence of a hazardous substance, pollutant, or contaminant in order for a Brownfield site to qualify.


A full discussion of the energy communities is available in our prior alert.



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