Biden expands wind and solar tax credit to nuclear, hydropower, geothermal energy

The Biden administration on Tuesday finalized a guidance that expands a tax credit that has historically applied only to wind and solar power to a range of other energy technologies. 

Under a new guidance issued Tuesday, the credit will also be able to be claimed by producers of power from sources like nuclear, geothermal, waterpower and marine wave energy.

The move is not necessarily a surprise, as 2022’s Inflation Reduction Act made the tax credit “technology neutral,” meaning it can apply to any energy source whose carbon emissions fall below a certain threshold.

But Biden’s move this week formally applied it to these specific technologies — and excludes other power sources like biomass energy facilities that are not yet under construction.

The rules say that future changes to the list of energy sources that can qualify for the credits will need to come with an analysis prepared by the Energy Department’s National Labs.

“The final rules issued today will help ensure America’s clean energy investment boom

continues – driving down utility costs for American families and small businesses, creating

good-paying construction jobs, and strengthening energy security by making the U.S. more

resistant to price shocks,” Treasury Secretary Janet Yellen said in a written statement. 

The guidance is one of several last-minute actions taken by the Biden administration as it seeks to get as much of its agenda across the finish line as possible before the Trump administration takes office. 

Ultimately, that administration may try to make further changes to the guidance. It also may try to, with the help of Congress, repeal or otherwise weaken the tax credit more broadly.