45X: Advanced Manufacturing Production Credit

Federal Agency

Sub-Department

Internal Revenue Service (IRS)

Purpose

To provide a production tax credit for domestic manufacturing of components for solar and wind energy, inverters, battery components, and critical minerals.

Applicant and/or Project Eligibility Requirements

Available for Domestic manufacturers of components of solar, wind, batteries, and inverters, as well as refiners, prodicers miners etc of specific critical minerals.

Decarbonization Considerations

Accelerating the development of domestic manufacturing will help increase the deployment of clean energy technologies broadly, as many programs, including tax credits for electric vehicles and renewable energy, require or strongly incentivize domestic content.

Equity Considerations

Training a domestic workforce will be critical for domestic manufacturing of these technologies. Consider working with regional economic development commissions and other community-based organizations to determine the most equitable local and regional partnerships.

Helpful Tips

Tax-exempt entities can leverage these credits through a new mechanism known as "elective" or "direct" pay. To learn more about how these tax credits work for entities with and without tax liability, check out our Funding Guidance here: https://cityrenewables.org/funding-guidance/understanding-available-incentives/tax-credits-for-renewable-energy/

Other Notes

Cannot claim 45X credit for property produced at facilities that received the Inflation Reduction Act 48C credit.