Updates to Internal Revenue Code §48 contained in last
year's Inflation Reduction Act (IRA) targeted to spurring
investment in underserved communities may be sufficient reason for
affordable housing developers, sponsors, and investors to consider
investing in solar and wind facilities in connection with upcoming
developments. As discussed below, when added to the credit,
including available adders, already available under §48, the
IRA's new bonus credit could be significant enough (potentially
as high as 70%) to consider including such a facility to
potentially lower operating and utility costs.
This article outlines the credit rate and potential adders for
consideration when planning a development. For example, if a
project meets all qualifications for the bonus rate (30%), is
located within an "energy community" because it is in a
census tract in which after December 31, 1999 a coal mine has
closed (with a 10% adder), and is part of a low-income housing tax
credit
