Solar & Wind

Solar and wind are both highly efficient forms of clean energy that are promoted through IRA provisions. With their uses spanning from rural to urban areas of the country, solar and wind energy effectively cut down air pollution, have low operational costs, and lead clean energy as the fastest-growing energy sources in the world.

The IRA provides tax credits that incentivize investment in clean energy properties, including facilities generating solar and wind electricity, with increased incentives for investment in low-income communities.

Read more about specific programs and credits below.

Production Tax Credit for Electricity from Renewables

Tax credit for the production of electricity from renewable sources.

IRA Section 13101. 26 U.S. Code § 45

  • Facilities generating electricity from wind, biomass, geothermal, solar, small irrigation, landfill and trash, hydropower, and marine and hydrokinetic renewable energy.

  • IRS Form 8835. Instructions for filing can be found here.

  • Projects beginning construction before 1/1/25.

  • Production Tax Credit

  • Eligible for Direct Pay?

    Yes, applies to facilities that are originally placed in service after December 31, 2022.

    Transferable?

    Yes

    Stackable?

    Yes

  • Base credit: 0.3 cents/kW

Advanced Manufacturing Production Credit

Tax credit for domestic manufacturing of components for solar, wind, inverters, battery components, and critical minerals.

IRA Section 13502. 26 U.S. Code § 45X

  • Domestic manufacturers

  • IRS Form 7207. Instructions for filing can be found here.

  • 2023-2029 and phases down over 2030-2032.

  • Production Tax Credit

  • Eligible for Direct Pay?

    Yes

    Transferable?

    Yes

    Stackable?

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

  • Varies by technology

Information compiled & gathered from the IRS website and the Inflation Reduction Act Guidebook released as “Building a Clean Energy Economy: A Guidebook to the Inflation Reduction Act’s Investments in Clean Energy and Climate Action, Version 2” as created by cleanenergy.gov & the White House.

Investment Tax Credit for Energy Property

Tax credit for investment in renewable energy projects.

IRA Section 13102. 26 U.S. Code § 48

  • Fuel cell, solar, geothermal, small wind, energy storage, biogas, microgrid controllers, and combined heat and power properties.

    For solar, (1) uses equipment that generates electricity to heat or cool a structure, provide solar process heat, and (2) equipment that uses solar to illuminate the inside of a structure using fiber-optic distributed sunlight or electrochromic glass.

  • IRS Form 3468. Instructions for filing can be found here.

  • Projects beginning construction before 1/1/25.

  • Investment Tax Credit

  • Eligible for Direct Pay?

    Yes

    Transferable?

    Yes

    Stackable?

    Yes

  • Base credit: 6% of qualified investment (basis of energy property)

Increase in Energy Credit for Solar & Wind Facilities Placed in Service in Connection with Low-Income Communities

Additional investment tax credit for small-scale solar and wind facilities in low-income communities.

IRA Section 13103, 13702(h). 26 U.S. Code § 48(e) & 48E(h)

  • Solar and wind facilities with a maximum net output of less than 5 megawatts.

  • More information to come

  • 48(e) begins in 2023, 48E(h) begins when Clean Electricity Investment Tax Credit becomes available (2025-2032).

  • Allocated investment credit (capped at 1.8 GW per year).

  • Eligible for Direct Pay?

    Yes

    Transferable?

    Yes

    Stackable?

    No rules

  • Base credit: 6% of qualified investment (basis of energy property)