To amend the Internal Revenue Code of 1986 to establish a tax credit for qualified combined heat and power system property, and for other purposes.
Summary
H.R. 6824 aims to incentivize the adoption of combined heat and power (CHP) systems by establishing a tax credit for qualified CHP system property. The bill amends the Internal Revenue Code of 1986 to include a new section (48F) that provides a 10% tax credit on the basis of qualified CHP property placed in service during the taxable year. The credit is enhanced by bonus credits for projects meeting domestic content requirements and those located in energy communities.
Expected Effects
The bill is likely to stimulate investment in CHP technology, leading to increased energy efficiency and reduced reliance on traditional power generation methods. This could result in lower energy costs for businesses and consumers, as well as reduced greenhouse gas emissions. The tax credit aims to make CHP systems more financially attractive, accelerating their deployment across various sectors.
Potential Benefits
- Encourages investment in energy-efficient CHP systems.
- Potentially lowers energy costs for businesses and consumers.
- Promotes the use of domestic content in energy projects, supporting US manufacturing.
- Incentivizes development in energy communities, fostering economic growth in those areas.
- Reduces greenhouse gas emissions through more efficient energy generation.
Potential Disadvantages
- The tax credit could increase the federal budget deficit.
- Compliance with performance and quality standards may create administrative burdens.
- The complexity of the eligibility criteria could create confusion and uncertainty.
- Potential for unintended consequences if the definition of 'energy community' is too broad or narrow.
- May disproportionately benefit larger entities capable of investing in CHP systems.
Constitutional Alignment
The bill aligns with the general welfare clause (Article I, Section 8) of the Constitution, as it seeks to promote energy efficiency and reduce pollution, contributing to the well-being of the population. The establishment of tax credits falls under Congress's power to lay and collect taxes. The bill does not appear to infringe on any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).