Overview
Section 45 incentivizes renewable energy generation through a transferable tax credit applicable to facilities producing electricity from wind, biomass, geothermal, solar, small irrigation, landfill gas, hydropower, and marine/hydrokinetic sources. The credit extends across a 10-year period following facility placement into service.
Credit Structure
Base credit per kilowatt-hour
Applies to facilities not meeting prevailing wage and apprenticeship requirements
With Prevailing Wage & Apprenticeship
Enhanced credit per kilowatt-hour
5x multiplier when prevailing wage and apprenticeship requirements are satisfied
Bonus Multipliers
Domestic Content Bonus
+10%Additional credit for facilities using steel, iron, and manufactured products meeting domestic content threshold requirements.
Energy Community Bonus
+10%Additional credit for facilities located in energy communities as defined by DOE mapping resources.
Eligibility & Requirements
- 1IRS registration with unique identifier required
- 2Tax return filing (or buyer/seller reporting for transfers)
- 3Production logs and emissions documentation per IRS standards
- 4Facility must be placed in service after specified dates
- 5Compliance with environmental and labor standards
Direct Pay Election
Tax-exempt organizations, states, political subdivisions, Tennessee Valley Authority, Indian Tribal governments, Alaska Native Corporations, and rural electricity co-ops may elect direct payment to the IRS for qualified facilities placed in service after December 31, 2022.
Learn More About Direct Pay