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Congress·In Committee·3 months ago

Congress proposes a new tax credit for combined heat-and-power systems, with bonus boosts in some areas

Legislative Progress

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Impacts

Positive Impacts(1)
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Key Points

  • Creates a new federal tax credit equal to 10% of the cost of qualifying combined heat-and-power equipment put into service.
  • Boosts the credit by another 10 percentage points for projects that meet U.S.-made material and manufacturing rules.
  • Boosts the credit by another 10 percentage points for projects located in certain “energy community” areas tied to energy jobs.
  • Limits the credit for very large systems, and generally excludes systems bigger than 50 megawatts.
  • Applies mainly to systems that start construction after December 31, 2024, and meet efficiency and output standards.
TaxesEnergyRenewable Energy

Milestones

2 milestones2 actions
Dec 17, 2025House

Referred to the House Committee on Ways and Means.

Dec 17, 2025

Introduced in House

What Happens Next

Projected impacts based on AI analysis

2025-01-01

Companies can qualify only for CHP projects that started construction after Dec 31, 2024 (if the bill becomes law).

Projects that began earlier generally won’t qualify for the new 48F credit, so businesses may focus on new builds or major new installations that clearly started after that date.

After enactment; likely within months

The IRS issues rules on what counts as meeting CHP performance/quality standards and what paperwork is required (if the bill becomes law).

Project owners will need specific measurements and records to prove eligibility; until guidance arrives, some projects may delay final plans or financing.

First tax filing season after the first qualifying projects are placed in service

Businesses begin claiming the CHP credit for projects put into service in that tax year (if the bill becomes law).

Eligible companies could see a lower federal tax bill for the year the system starts operating, improving project payback and cash flow.

Source Information

Document Type

Congressional Bill

Official Title

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.

Bill NumberHR 6824
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the House Committee on Ways and Means.

Sponsor

Cosponsors

(1)
R: 1

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.