Eligible Tax Credits

The Inflation Reduction Act encompasses a diverse array of tax credits aimed at incentivizing various aspects of clean energy production and innovation.

The tax credits include: 

§30C Alternative Fuel Vehicle Refuelling PropertyEncourages the establishment of refuelling and charging stations in underserved areas, promoting the adoption of alternative fuels such as electricity, ethanol, and hydrogen.
§45 Renewable Electricity ProductionProvides incentives for generating electricity from renewable sources, reducing reliance on fossil fuels and mitigating carbon emissions.
§45Q Carbon Oxide SequestrationSupports efforts to capture and store carbon dioxide within the United States, combating climate change by mitigating greenhouse gas emissions.
§45U Zero Emission Nuclear Power ProductionIncentivizes the production of electricity from nuclear power, contributing to a carbon-free energy future.
§45V Clean Hydrogen ProductionPromotes the development of clean hydrogen production facilities, a crucial component of the transition to a sustainable energy economy.
§45X Advanced Manufacturing ProductionStimulates domestic manufacturing of solar and wind components, fostering innovation and job creation in the clean energy sector.
§45Y Clean Electricity ProductionOffers technology-neutral incentives for clean electricity production, driving investment in diverse clean energy technologies.
§45Z Clean Fuel ProductionSupports the domestic production of clean transportation fuels, reducing dependence on fossil fuels and enhancing energy security.
§48 Energy CreditProvides an investment credit for renewable energy projects, facilitating capital flow into the renewable energy sector.
§48C Qualifying Advanced Energy ProjectIncentivizes investments in clean energy product manufacturing, bolstering the development and commercialization of innovative clean technologies.

Eligibility and Transaction Mechanisms

Eligible taxpayers, including individuals, corporations, trusts, estates, partnerships, and S-corporations, can participate in credit transfers starting January 1, 2023. Also, transactions can occur at both individual and partnership levels, with each partner having the option to direct the sale of their share of credits. Tax-exempt “sellers” are ineligible to transfer credits to a third party but can utilize the elective pay option under §6417.  


Market Dynamics and Pricing

The transferable tax credit market is still in its nascent stage. The Department of Treasury released guidance on tax credit transfers in June 2023, with initial transactions closing in the latter half of the same year. Pricing dynamics vary based on credit type, project scale, and market conditions. Historically, Production Tax Credits (PTCs) for established sources like wind and solar have traded at higher rates than Investment Tax Credits (ITCs) for emerging technologies. Observed pricing to date on various transactions has ranged from .80 to .95 per dollar value of credits.

Get in Touch

Contact us to find out how we can help price and execute your transactions:

Glenn Engle, Director & Co-Founder, Tax Credit Desk

Chris Fort, Director & Co-Founder, Tax Credit Desk