There are three “adder” credits in the legislation. These can be obtained 1) By meeting specified domestic content requirements; or 2) By placing projects in energy communities as defined by the bill; or 3) an allocated credit is available upon application and award for certain low-income solar activities. Adders can be “stacked” on top of the underlying credits to receive higher ITC or PTC levels. However, the low-income adder only provides the opportunity for a higher ITC, not PTC.

Domestic Content Bonus Credit

• An additional 8 percentage points of bonus ITC credit is available for projects that meet domestic content requirements. The domestic content standard will be set by Treasury under 661 of Federal Regulations. For projects electing the PTC, the 40% manufactured products requirement applies through 2024, followed by 45% in 2025, 50% in 2026, and 55% in 2027 and beyond. Manufactured content is further explained:
  • The products which are components of a qualified facility upon completion will be deemed to have been produced in the United States if the adjusted percentage of the total costs of all such manufactured products of the facility are attributable to manufactured products (including components) which are mined, produced, or manufactured in the United States.
• If the project also meets requirements to receive a higher underlying ITC/PTC credit (See New ITC and PTC Levels; Transition Issues), such as meeting prevailing wage and apprenticeship standards, it is 8 additional ITC percentage points for a total of 10 percentage points. That would mean a total of a 40% ITC. On the PTC for solar, a company will receive an additional 10% of what it qualified for (either 10% of .3 cents or 10% of 1.5 cents, adjusted for inflation. That would mean a total of 110% of the PTC.

Energy Community Bonus Credit

• The same structure of bonus credit (2 plus 8 percentage points for the ITC, or 2% + 8% for the PTC) is available for siting a project in an energy community. The term “energy community” includes three types of communities:
  • Brownfield sites as defined under Sections 101(39)(A), (B), and (D)(ii)(III) of CERCLA;
  • As determined by the Secretary, (1) a metropolitan or non-metropolitan statistical area with unemployment rates, from the previous year, at or above the national average and (2) at least 0.17% of employment or 25% of local tax revenues are related to the extraction, processing, transport, or storage of coal, oil, or natural gas at any time beginning in 2010; and
  • Census tracts, plus their adjacent census tracts, where a coal mine closed after 1999 or a coal-fired power plant was retired after 2009.

Note: The adder credits for Domestic Content and Energy Communities are only available for projects placed in service after December 31, 2022.