Investment Tax Credit

The Inflation Reduction Act (IRA) expanded several key tax credits to accelerate clean energy adoption and domestic manufacturing.

IRC §48 – the Investment Tax Credit (ITC)
Supports renewable energy projects like solar, geothermal, and storage.

Who is Eligible?

For Profit Entities: Corporations, partnerships, and individuals with U.S. federal tax liability who can claim ITC directly on their federal tax return.
Tax-Exempt and Government Entities that are exempt from tax by § 501(a), § 501(c), and § 501(d) (eligible through Direct Pay, also called Elective Pay):
- States (including DC), counties, cities, and other political subdivisions such as school districts.
- Indian Tribal governments, political subdivision thereof, or any agency or instrumentality of a Tribal government.
- Alaska Native Corporations, the Tennessee Valley Authority, rural electric cooperatives.

Technologies include:

Solar
Wind
Geothermal
Energy Storage
Combined Heat and Power (CHP)
Fuel Cells
Waste Energy Recovery
Biogas
Microgrid Controllers

Prevailing Wage & Apprenticeship and Domestic Content bonus deductions apply to ITC.

Speak to a Walker Blue Advisor about ITC

One Big Beautiful Bill Act (OBBBA) Change: The eligibility window has been shortened.

Solar and wind projects that begin construction before July 4, 2026, are protected under current ITC rules. Projects starting after that date are subject to phase-out schedules. Energy storage, geothermal, and other technologies continue to qualify, but all must now meet sourcing requirements and avoid foreign entity involvement.

IRC §45X – the Advanced Manufacturing Production Credit
Offers incentives for producing clean energy components in the U.S.

Who is Eligible?

U.S.-based taxable business entity that produces renewable energy products.

§45X rewards each qualifying component produced and sold to an unrelated party, directly reducing the manufacturer’s tax liability. The credit is intended to incentivize domestic clean energy supply chains.

Eligible products include:

Solar
Wind
Battery components
Critical minerals
Inverters
Grid eqiupment
Other clean energy components

Speak to a Walker Blue Advisor about 45X Tax Credit

One Big Beautiful Bill Act (OBBBA) Update: The credit remains available for domestic production of clean energy components. However, eligibility now excludes entities with foreign ownership or prohibited sourcing. Wind-related components begin to phase out after 2027.

IRC §48C – the Advanced Energy Projects Credit
Provides competitive tax credits for investments in facilities that manufacture clean energy technologies or improve energy efficiency.

Who is Eligible?

For Profit Entities: Corporations, partnerships, and individuals
Tax-Exempt and Government Entities that are exempt from tax by § 501(a), § 501(c), and § 501(d) (eligible through Direct Pay , also called Elective Pay):
- States (including DC), counties, cities, and other political subdivisions such as school districts.
- Indian Tribal governments, political subdivision thereof, or any agency or instrumentality of a Tribal government.
- Alaska Native Corporations, the Tennessee Valley Authority, rural electric cooperatives.

Project Categories Include:

Renewable Energy Infrastructure and Technologies

Renewable Energy Infrastructure and Technologies
- Add, expand, or re-equip a facility producing clean energy components
Industrial Decarbonization Technologies
- Implement technologies that enable industrial processes to achieve lower carbon emissions
Critical Materials Production and Processing
- Secure the supply of essential materials for renewable energy technologies through processing, refining, or recycling critical minerals.

Under the IRC §48C businesses that manufacture certain renewable energy or energy storage products, parts, or components in the US, or that produce critical minerals in the US, may qualify for the Production Tax Credit (PTC). The PTC provides a tax credit of up to 10% of the qualified investment for eligible projects. Eligible components include: Solar, Wind, Inverters, Batteries, and Critical Minerals.

Speak to a Walker Blue Advisor about 48C Tax Credit