Overview
Section 48 provides an investment tax credit for qualified energy property placed in service. Unlike production tax credits that are based on energy output, the ITC is calculated as a percentage of the qualified basis of the property. The credit applies to various clean energy technologies including solar, fuel cells, geothermal, and battery storage systems.
Credit Structure
Base investment credit
Base rate for projects not meeting wage/apprenticeship requirements
With Prevailing Wage & Apprenticeship
Enhanced investment credit
Full credit with prevailing wage and apprenticeship requirements satisfied
Bonus Multipliers
Domestic Content Bonus
+10%Additional credit for projects meeting domestic content requirements for steel, iron, and manufactured products.
Energy Community Bonus
+10%Additional credit for projects located in designated energy communities.
Low-Income Community Bonus
+10-20%Additional credit for projects benefiting low-income communities or located on Indian land.
Eligibility & Requirements
- 1Property must be energy property as defined in Section 48
- 2Property must be placed in service during the tax year
- 3Taxpayer must have ownership interest in the property
- 4Construction must begin before applicable deadline dates
- 5Must meet all IRS registration and reporting requirements
Direct Pay Election
Tax-exempt organizations, state and local governments, tribal governments, rural electric cooperatives, and other qualified entities may elect direct payment for Section 48 credits.
Learn More About Direct Pay