Overview
Section 45Y is a technology-neutral production tax credit that replaces the technology-specific Section 45 credit. It provides credits for electricity generated by facilities with zero or near-zero greenhouse gas emissions, regardless of the technology used. This approach allows new and emerging clean energy technologies to qualify for the same incentives as established renewable sources.
Credit Structure
Base credit per kilowatt-hour
Base rate for facilities not meeting wage/apprenticeship requirements
With Prevailing Wage & Apprenticeship
Enhanced credit per kilowatt-hour
Full credit with prevailing wage and apprenticeship requirements satisfied
Bonus Multipliers
Domestic Content Bonus
+10%Additional credit for facilities meeting domestic content requirements for steel, iron, and manufactured products.
Energy Community Bonus
+10%Additional credit for facilities located in designated energy communities.
Eligibility & Requirements
- 1Facility must generate electricity with zero or near-zero GHG emissions
- 2Facility must be placed in service after December 31, 2024
- 310-year credit period from placed-in-service date
- 4Must be located in the United States or U.S. territories
- 5Credit available until later of 2032 or when electricity sector emissions targets are met
Direct Pay Election
Tax-exempt organizations, state and local governments, tribal governments, and other qualified entities may elect direct payment for Section 45Y credits.
Learn More About Direct Pay