Key Labor Requirements:
- Prevailing Wages: Companies must pay “laborers and mechanics” prevailing wages as determined by the Department of Labor (DOL), consistent with the Davis-Bacon Act.
- Registered Apprenticeships: Projects must ensure that a certain percentage of total labor hours are performed by qualified apprentices from registered apprenticeship programs. The percentage varies by the year construction begins:
- 10% for projects starting before 2023.
- 12.5% for projects starting in 2023.
- 15% for projects starting in 2024 or later.
- Record Keeping and Compliance: Strong recordkeeping is required to demonstrate compliance with these standards. Companies must maintain records of wage rates, worker classifications, and labor hours worked.
- Project Labor Agreements (PLAs): The Departments of Treasury and Labor encourage using PLAs to help ensure compliance with prevailing wage and apprenticeship requirements. Projects under a qualifying PLA may avoid penalties for non-compliance.
- Incentives for Compliance: By meeting these requirements, taxpayers can claim an increased credit equal to five times the base incentive for certain clean energy tax credits.
- Exemptions and Exceptions: Small-scale energy storage projects under 1MW capacity are exempt from prevailing wage and apprenticeship requirements for the bonus rate. Projects that began construction before specific deadlines may also qualify for exemptions.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-labor-requirements-for-energy-storage-projects-to-maximize-ira-incentives/
