IRS Section 45U
Transferable Production Tax Credit for Nuclear Zero-Emission Power

Summary:

The Zero Emission Nuclear Production Tax Credit (PTC) is a transferable tax credit which rewards the production and sale of nuclear energy produced with zero-emissions. The credit is available to qualified facilities who own energy production sites which did not receive an IRS Section 45J tax credit. To qualify, the facility must have operated prior to December 31, 2023. This is a credit to incentivize existing nuclear energy facilities to continue producing zero-emission electricity and avoid decommission. Prior to 2025, facilities who generate annual energy less than 1 megawatt qualify, after the threshold rises to a higher level.

Date in Effect:

January 1, 2023 – December 31, 2032

*Only available to facilities placed in service prior to December 31, 2023*

Calculation Details:

Internal Revenue Service Section 45U carries a maximum credit of $0.015 cents/kWh (kilowatt hour) produced and sold with zero emission. The maximum credit is only obtainable if prevailing wage and apprenticeship thresholds are met.

The base credit is $0.003 cents/kWh (kilowatt hour) and receives a 5x multiplier for a max of $0.015 cents/kWh (kilowatt hour) when prevailing wage is met for workers doing alteration or repair at the facility.

A phase out of the credit occurs when the facility generates more than $0.025 cents/kWh (kilowatt hour). Any profit made above $0.025 cents/kWh (kilowatt hour) is multiplied by 16% and then compared to the eligible credit. The facility is eligible to claim the lesser of the spread multiplied by 16% or the credit ($0.003 or $0.015).

Base Credit

IF([Profit cents/kWh > $0.025 cents/kWh], THEN(MIN[{(Profit cents/kWh - $0.025)}*16%},$0.003]), ELSE $0.003])

Multiplier Credit

IF([Profit cents/kWh > $0.025 cents/kWh], THEN(MIN[{(Profit cents/kWh - $0.025)}*16%},$0.015]), ELSE $0.015])

Filing Requirements:

  • Register and obtain unique identifier number from the Internal Revenue Service

  • File tax return for self, or if transferring the credit for cash, then reflect the sale of both buyer and seller’s tax return

Direct Pay:

Direct Pay is an election that allows the taxpayer to sell directly to the Internal Revenue Service. Section 30C transferable tax credits allow the following entities to make this election:

  • Tax-exempt organizations

  • States

  • Political subdivisions

  • The Tennessee Valley Authority

  • Indian Tribal governments

  • Alaska Native Corporations

  • Rural electricity co-ops.