Tecogen equipment eligible for Inflation Reduction Act tax credits

Tecogen, a clean energy company providing ultra-efficient and clean on-site power, heating and cooling equipment, has confirmed the enhanced tax credits available under the Inflation Reduction Act apply to systems that include its combined heat and power (CHP) equipment.
The Inflation Reduction Act increased tax credits - including investment tax credit (ITC) - to rise to 30% of the project costs that incorporate certain low emisisions technologies.
This includes CHP equipment, for projects that begin construction prior to 1 January 2025, as lon as the taxpayer satisfies requirements relating to the payment of prevailing wages and the use of apprentices.
The tax credits may be increased by an additional 10% if the taxpayer satisfies additional requirements relating to domestic content.
Certain tax credits also apply to microgrid projects beginning construction before January 1, 2025, as well as a variety of low or no emission technologies including solar, wind, hydrogen, biomass and other technologies.
State and local governments and tax-exempt entities may also benefit from certain tax credits through direct payments or transfers of tax credits to unrelated third parties. This particular new direct pay option is especially impactful given the fact that many ideal facilities for CHP systems are not-for-profit, including many healthcare and hospital facilities, schools and universities, as well as recreation centres. These customers historically have not been able to benefit from previous iterations of the ITC, so the company is hopeful that it will see increased uptake in these market verticals.
“We are pleased that the tax provisions in the Inflation Reduction Act recognise the benefits available from CHP equipment and provide incentives for incorporating CHP equipment into HVAC systems,” said Benjamin Locke, Tecogen’s CEO.
“We believe that the expanded and increased tax credits provide meaningful incentives for purchases of our CHP equipment, and we look forward to working with customers who wish to take advantage of significantly improved economics associated with an investment in Tecogen cogeneration equipment and chillers that provide energy cost savings, near zero emissions, and increased resiliency to grid power shortages, outages, and demand charges.”