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
What This Bill Does
This bill adds section 48F to the Internal Revenue Code for qualified combined heat and power system property. The base credit is 10 percent of the basis of qualifying property placed in service, excluding basis attributable to rehabilitation expenditures and property already receiving a section 45 production credit. Qualifying property must be combined heat and power system property, be newly constructed or first used by the taxpayer, be depreciable or amortizable, and meet any Treasury standards prescribed after consultation with the Secretary of Energy. The provision applies bond-financing reduction rules, adds a 10 percentage point domestic content bonus, and adds a 10 percentage point energy community bonus. Combined heat and power property must produce electricity and useful thermal energy from the same source, meet efficiency rules, and be no larger than 50 megawatts or equivalent mechanical or thermal energy capacity, with a biomass exception to the 60 percent efficiency threshold.
Who Benefits and How
Industrial facilities, commercial building owners, manufacturers, and utilities installing combined heat and power systems benefit from a 10 to 30 percent tax credit depending on bonuses. CHP equipment manufacturers and installers benefit from increased demand. Energy community projects and domestic content supply chains benefit from bonus credits. Biomass-fueled CHP projects benefit from the special efficiency rule.
Who Bears the Burden and How
Federal taxpayers bear the cost of the new credit through reduced tax revenue. Treasury and IRS staff must administer section 48F, define standards, and coordinate with the Department of Energy. Taxpayers claiming the credit must document basis, depreciation, efficiency, domestic content, energy community eligibility, and exclusions. Competing energy technologies may face relative disadvantage from the new incentive.
Key Provisions
- Creates a new 10 percent section 48F tax credit for qualified combined heat and power system property.
- Adds 10 percentage point bonuses for domestic content and energy community projects.
- Requires property to meet performance and quality standards prescribed by Treasury after Energy consultation.
- Defines combined heat and power system property, capacity limits, efficiency requirements, and a biomass exception.
- Applies the credit to qualifying property placed in service after enactment under the bill rules.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Creates a new section 48F investment tax credit for qualified combined heat and power system property equal to 10 percent of basis, with 10 percentage point bonuses for domestic content and energy communities, performance standards, depreciation rules, and Treasury-Energy coordination.
Key Policy Areas
Tax, Energy, Manufacturing
Primary Purpose
Creates a new section 48F investment tax credit for qualified combined heat and power system property equal to 10 percent of basis, with 10 percentage point bonuses for domestic content and energy communities, performance standards, depreciation rules, and Treasury-Energy coordination.
Policy Domains
Substantive provisions
Identified Gains
- Industrial facilities
- Commercial building owners
- CHP equipment manufacturers
- Utilities
- Energy community projects
- Domestic content suppliers
Identified Costs
- Federal taxpayers
- Treasury tax administrators
- IRS staff
- Taxpayers claiming the credit
- Competing energy technologies
Sponsors
Legislative Progress
In CommitteeMs. Van Duyne (for herself and Mr. Kustoff) introduced the …
Referred to the House Committee on Ways and Means.
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
CHP equipment manufacturers, Domestic content suppliers, Industrial facilities installing CHP
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of the Treasury
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology