The U.S. Treasury Department and the IRS recently put forth a Notice of Proposed Rulemaking (“NOPR”) which outlines proposed changes to prevailing wage and apprenticeship requirements for renewable energy developers. To benefit from the tax incentives provided by the Inflation Reduction Act of 2022 (“IRA”), developers must employ apprentices and pay a prevailing wage to workers.
The NOPR came into play a little over a year after the IRA was enacted and nine months subsequent to the release of the initial advice. Although the initial guidelines hinted at an enhanced focus on labour rights, the concrete proposals to this effect are a recent development.
The wage and apprenticeship conditions, while potentially strengthening the workforce in the renewable energy sector, could influence the feasibility of specific projects. Firms need to calibrate cost projections to account for the increased wage costs. Additionally, the role of apprentices within a firm’s structure may need re-defining to maximise utility and comply with the proposed new rules.
Developers should vigilantly monitor the progression of these proposals, understanding their potential implications, and adjusting their strategies accordingly. As the IRS and The Treasury Department strive for a more equitable green energy sector, firms may need to reinvent their current models to comply and stay competitive.
More information about the legislation and its impact can be found in this article from
Bradley Arant Boult Cummings LLP.