The Treasury Department proposed new tax guidance on Friday for clean energy projects, providing further clarity for developers looking to invest in the sector.

The Section 48 investment tax credit – which was included and expanded in the Inflation Reduction Act passed by Democrats and signed by President Joe Biden last year – aims to subsidize construction costs for the build-out of new energy infrastructure. Although the credit has been traditionally used for solar projects, the tax credit has now been extended to offshore wind, energy storage, and other projects.

The newest guidance would update the types of energy infrastructure eligible for the credit, including transfer equipment such as subsea export cables that are used in offshore wind projects, along with certain power conditioning equipment located on onshore substations.

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The rules are also include guidance for the eligibility of standalone battery storage, along with the inclusion of costs of interconnection-related property for lower-output clean energy installations. The new guidance would include the cost of upgrades to local transmission and distribution networks.

“Today’s guidance provides clarity for offshore wind and battery storage projects, as well as small scale projects that need to connect to the grid,” said Deputy Secretary of the Treasury Wally Adeyemo. “Ensuring these projects can move forward efficiently is key to creating good-paying clean energy jobs and lowering Americans’ utility bills.”

The IRA expanded existing tax credits and created new ones with the aim of incentivizing the growth of green energy – but the offshore wind industry has been recently facing investment struggles. The White House states that the new guidance will provide further confidence to developers to further pour into the sector.

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“The Inflation Reduction Act has already fueled a clean energy investment boom in America,” John Podesta, a senior Biden advisor on Clean Energy Innovation and Implementation. “Today’s guidance from Treasury on the Investment Tax Credit gives clean energy developers even more clarity and confidence to continue their momentum.”