New ESIC Act to Bring Tax Credits to Clean Energy Innovation

Energy innovators across the nation will delight to hear about the upcoming boost announced by Congress. This boost comes in the form of the Energy Sector Innovation Credit (ESIC) Act – a tax proposal which aims to encourage innovation specifically in the clean energy sector.The funding will offer incentives to those performing innovation, presented as tax credits, in an effort to bring their projects to the mass market.

As it is a tax credit, the amount you may be eligible to receive is proportional to the earnings of a project from market sales, helping to further remove the risk of technologies becoming over-reliant on tax credits to stay afloat. As your product scales up on the commercial marketplace, the credit slowly proportionally decreases. This method provides help when needed most, and fades out as the technology begins to stand on its own two feet. 

In the press release following the bill’s introduction, Senator Crapo explains: 

“ESIC will incentivize technology-wide clean energy innovation so new, clean technologies can rapidly scale up and compete independently in the market. Moreover, ESIC automatically scales down credits as technologies’ market penetration ramps up, so taxpayer dollars do not subsidize market-mature technologies. The U.S. is a leader in energy production because our robust economy allows for innovation and pathways to clean energy solutions…”

Are you developing new software for an existing application? Did you know your development work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? Even if your development isn’t successful your work may still qualify for R&D credits (i.e. you don’t need to have a patent to qualify). To find out more, please contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.

Who We Are:

Swanson Reed is one of the U.S.’ largest Specialist R&D tax advisory firms. We manage all facets of the R&D tax credit program, from claim preparation and audit compliance to claim disputes.

Swanson Reed regularly hosts free webinars and provides free IRS CE and CPE credits for CPAs. For more information please visit us at or contact your usual Swanson Reed representative.

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