48/48E: Clean Electricity Investment Tax Credit
Internal Revenue Service (IRS)
To provide a tax credit for facilities that generate clean electricity. 48 is applicable to facilities that generate clean electricity before 2025. 48E is a technology-neutral tax credit for investment in facilities that generate clean electricity starting in 2025.
Applicant and/or Project Eligibility Requirements
Eligible technologies include fuel cell, solar, geothermal, small wind, energy storage, biogas, microgrid controllers, combined heat and power properties before 2025 and any resource with an estimated net greenhouse gas emissions rate of zero after 2025
Updates in the IRA provide greater opportunities to utilize this tax credit. Consider under-utilized properties like brownfields for new clean energy projects to take advantage of bonus credits. Additionally, consider pairing energy storage with any of your energy projects to increase community resiliency and the scale of your project.
Pairing this tax credit with bonus adders like the Energy Communities and Low-Income Communities bonuses by siting clean energy projects in applicable locations can reduce the cost of the overall project and provide additional benefits to disadvantaged communities.
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/
Learn more about tax credits for renewable energy here: https://cityrenewables.org/funding-guidance/understanding-available-incentives/tax-credits-for-renewable-energy/ Entities can only elect the ITC (48) or the PTC (45). For more information on the tax credits and which to select, see this resource from DOE: https://www.energy.gov/eere/solar/federal-solar-tax-credits-businesses For projects <1 MW, entities do not have to meet the prevailing wage and apprenticeship requirements