IRS Announces Round Two of the Qualifying Advanced Energy Project Credit Program Under IRC Section 48C

The Department of the Treasury and the IRS on April 29 released guidance (Notice 2024-36) to implement round two of the Qualifying Advanced Energy Project Tax Credit Program under Internal Revenue Code Section 48C(e). 

Extended under the Inflation Reduction Act (IRA), Section 48C is designed to provide applicants with a federal tax credit of up to 30% of eligible expenditures to promote investments in clean energy manufacturing and recycling, industrial decarbonization, and the processing, refining, and recycling of critical materials. Examples of qualifying property can be found in Notice 2024-36, Appendix A

The second round of credit allocations will allocate up to $6 billion in credits, with approximately $2.5 billion allocated to projects located in qualifying energy communities. Approximately $4 billion in credits were allocated in the first round, which was significantly oversubscribed, with applicants submitting concept papers seeking nearly $42 billion in tax credits. For prior coverage of takeaways from round one, see 4 Lessons for Round 2 of Section 48C Tax Credit Applications.

Treasury and the IRS issued Notice 2023-44 on May 31, 2023, to provide guidance for the first round of the program. Notice 2024-36 announces the 2024 allocation round and modifies appendices A, B, and C of Notice 2023-44

As in the first round, Treasury and the IRS are partnering with the Department of Energy (DOE) to recommend projects. The DOE Section 48C portal will open no later than May 28, 2024, for taxpayers to submit a concept paper and begin the process of seeking a Section 48C credit allocation.

Section 48C Round Two

To apply for an IRC Section 48C credit allocation, applicants will face a similar two-step application process as in round one, requiring the submission of a concept paper and a full application. Submissions will be reviewed by the DOE across multiple criteria and policy factors, such as: 

  • Commercial viability; 
  • Greenhouse gas emissions impact; 
  • Strengthening U.S. supply chains and domestic manufacturing for a net-zero economy; and 
  • Workforce and community impact. 

The DOE has identified in Appendix B of Notice 2024-36 specific priority areas for round two clean energy manufacturing and recycling projects. These areas relate to manufacturing investments in:

  • Clean hydrogen – electrolyzers, fuel cells, and associated components.
  • Electric grid – distribution and large power transformers and associated subcomponents, materials, power electronics, HVDC cables, HV circuit breakers, and other grid components and equipment.
  • Electric heat pumps – air-source or geothermal heat pump components and systems, particularly heat pumps for industrial or networked applications and/or those utilizing low-GWP refrigerants. 
  • Electric vehicles – power electronics, permanent magnets, specific battery components, capital equipment for battery manufacturing, sub-components and components specific to medium and/or heavy-duty electric vehicles, and final assembly of MDV/HDV electric vehicles.
  • Energy-intensive materials with a substantially lower carbon intensity when compared to industry-specific benchmarks - low carbon cement, concrete or components such as supplementary cementitious materials, low carbon iron and steel, and low carbon aluminum.
  • Nuclear energy - specialized components and equipment for nuclear power reactors or their fuels, for both existing reactors and new reactor deployments.
  • Solar energy - Polysilicon, wafer production facilities, ingot and wafer production tools, and solar rolled glass production facilities.
  • Sustainable aviation fuels - equipment needed for low-carbon aviation fuel production (including feedstock handling equipment and pre-treatment reactors).
  • Wind energy - component production facilities and specialized steel production, particularly for offshore wind, such as monopile-grade steel and towers; recycling of wind components, particularly blades; offshore wind electrical balance of system component manufacturing, including submarine cables (AC and DC), large power transformers, and HVDC converter stations and converter station components.


The DOE portal for the submission of round two concept papers is expected to open no later than May 28, 2024. The deadline for submission of concept papers is 30 days after the portal begins accepting submissions. The portal will begin accepting full applications in the summer of 2024. Applicants have 50 days from the application window opening to submit their full applications. The DOE intends to announce round two allocation awards no later than January 15, 2025. 

Applicants without sufficient tax liability to utilize the tax credits are still encouraged to apply, because Section 48C credits qualify as eligible credits under IRC Section 6418 and, as a result, are eligible to be transferred to an unrelated party in exchange for cash. 

Are You Ready for Round Two?

Even though the funding pool for round two is larger than it was for round one, the application process is expected to be just as competitive. Prospective applicants planning investments in DOE priority areas will likely be better positioned to submit a competitive concept paper when round two opens later this May. 

Planning to apply for 48C funding? Contact BDO’s Business Incentives & Tax Credits team for assistance in preparing a persuasive concept paper and building a path to ultimate credit monetization.