Overview
Section 48C provides an investment tax credit for qualified investments in advanced energy projects. The Inflation Reduction Act allocated $10 billion in new tax credits, with $4 billion reserved for projects in energy communities. Projects must apply for and receive an allocation from the IRS to claim the credit.
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
Energy Community Priority
+40% of funds$4 billion of the total $10 billion allocation is reserved for projects located in energy communities.
Eligibility & Requirements
- 1Must apply for and receive IRS allocation before claiming credit
- 2Project must be for re-equipping, expanding, or establishing manufacturing facilities
- 3Eligible projects include clean energy equipment manufacturing, critical mineral processing, and industrial decarbonization
- 4Construction must begin within 2 years of allocation
- 5Project must be placed in service within 4 years of allocation
Direct Pay Election
Tax-exempt organizations and certain other qualified entities may elect direct payment for Section 48C credits on allocated advanced energy projects.
Learn More About Direct Pay