Case Study: Manufacturer Awarded $12M in Green Energy Credits

  • Tax strategies
  • 5/10/2024
Adult Foreman in Warehouse
Organization: A fast growing manufacturer of specialty parts used in electrical distribution.  Need: Experience and assistance in applying for Inflation Reduction Act tax credits. Outcome: $12.3 million in tax credits, helping to offset a $41 million expansion project.

Understanding the situation

A manufacturer of specialty parts used in electrical distribution and infrastructure was experiencing year-over-year growth and needed to further expand facilities to keep up with demand. The company was working on a $41 million expansion project when it learned the project might qualify for new Inflation Reduction Act (IRA) tax credits.

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Exploring the challenge

CLA’s clean energy tax team has been on the forefront of these beneficial IRA tax credits, helping clients in many industries understand and qualify for them. This manufacturer had no experience applying for tax credits and reached out to CLA professionals for help.

Under the IRA, section 48C Qualifying Advanced Energy Project Credit, $10 billion was allocated for qualifying projects advancing key American initiatives regarding clean energy technology and manufacturing. For those meeting the criteria, up to 30% of total project costs can be offset with an allocated credit.   

CLA helped the client step-by-step with the application and required concept paper. Initially, the U.S. Department of Energy sent the company a discouraging letter about the application. But the CLA team was confident the project qualified and worked with the company to improve and resubmit the application.

Thanks to the proactive support from CLA, we are in a position of strength to grow for years to come. This credit is a huge win for our customers, employees, and the communities we serve CFO, Manufacturing Company

Achieving results

The revised application was approved, and the manufacturer was awarded $12 million in IRA tax credits. The tax credits will fund 30% of the company’s $41 million expansion project, which will help fuel growth for years to come.

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