Business Energy Investment Tax Credit (ITC)

Business Energy Investment Tax Credit (ITC) is sponsored by U.S. Department of Treasury (IRS). The ITC allows businesses to claim a tax credit for a percentage of the cost of installing a solar energy system. This credit directly reduces federal income tax liability.

Projects commencing construction in 2026 qualify for a 30% tax credit.

Clean Electricity Investment Credit | Internal Revenue Service Access your tax information with an IRS account.

Include Historical Content Include Historical Content Include Historical Content Include Historical Content Business and self-employed Governments and tax-exempt bonds Indian Tribal Governments Apply for an Employer ID Number (EIN) Identity Protection PIN (IP PIN) Bank Account (Direct Pay) Payment Plan (Installment Agreement) Electronic Federal Tax Payment System (EFTPS) Tax Withholding Estimator Where’s my amended return?

Businesses & Self-Employed Earned Income Credit (EITC) Clean Energy and Vehicle Credits POPULAR FORMS & INSTRUCTIONS Fake IRS email or message Clean Electricity Investment Credit More In Credits & Deductions Family, dependents and students Clean energy and vehicle credits and deductions Individuals credits and deductions Business credits and deductions Employee Retention Credit Forms for business credits The Clean Electricity Investment Credit is a newly established, tech-neutral investment tax credit that replaces the Energy Investment Tax Credit once it phases out at the end of 2024.

This is an emissions-based incentive that is neutral and flexible between clean electricity technologies. The credit is available to taxpayers with a qualified facility and energy storage technology placed in service after Dec. 31, 2024.

The Clean Electricity Investment Credit phase-out starts for the later of 2032 or when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower. The base amount of the Clean Electricity Investment Credit is 6 percent of the qualified investment. Credit is increased by up to: 5 times or up to 30% for facilities meeting prevailing wage and registered apprenticeship requirements.

10-percentage points for facilities meeting certain domestic content requirements for steel, iron and manufactured products. 10-percentage points if located in an energy community . The Clean Electricity Investment Credit is eligible for direct payment or transfer .

Taxpayers cannot claim both investment credit and production credit for the same facility. Taxpayers with a qualified facility and energy storage technology placed in service after Dec. 31, 2024 may claim the credit.

Elective payment and transfer of credits may be available to certain applicable entities to include tax-exempt organizations and government entities. A pre-filling registration is required for elective payments and transfers.

Taxpayers will need to complete Form 3468, Investment Credit and file it with the taxpayer’s annual return submitted to the IRS for the first taxable year in which the taxpayer reports a clean energy investment credit. IR-2023-22, Treasury and IRS issue proposed regulations defining energy property (Nov. 17, 2023) IR-2022-193, IRS seeks comments on upcoming energy guidance (Nov.

3, 2022) Final Regulations: Clean Electricity Production Credit and Clean Electricity Investment Credit Final Regulations: Definition of Energy Property and Rules Applicable to the Energy Credit NPRM: Definition of Energy Property and Rules Applicable to the Energy Credit Notice 2023-38, Domestic Content Bonus Credit Guidance under Sections 45, 45Y, 48 and 48E Notice 2023-29, Energy Community Bonus Credit Amounts under the Inflation Reduction Act of 2022 Notice 2022-51, Request for comments on prevailing wage, apprenticeship, domestic content, and energy communities requirements Notice 2022-49, Request for Comments on Certain Energy Generation Incentives Prevailing wage and registered apprenticeship Domestic content bonus credit Frequently asked questions for energy communities Elective pay and transferability Page Last Reviewed or Updated: 05-Jan-2026