The Section 48E Clean Electricity Investment Tax Credit was created by the Inflation Reduction Act of 2022 (IRA) and added to the Internal Revenue Code as §48E. It replaces the legacy §48 energy investment tax credit for qualifying facilities placed in service after December 31, 2024, and works in parallel with the §45Y Clean Electricity Production Tax Credit (PTC). Taxpayers generally elect either §45Y (per-kWh production credit) or §48E (one-time investment credit) for the same facility, but not both.
Unlike the older §48, which listed specific eligible technologies (solar, wind, fuel cells, etc.), §48E is technology-neutral: any electricity-generating facility with an anticipated greenhouse-gas emissions rate of not greater than zero, plus qualified energy storage technology, can qualify. This covers solar, wind, geothermal, hydropower, nuclear, and emerging technologies as long as they meet the emissions threshold determined by the Treasury and IRS.
The base credit is 6% of qualified investment, rising to 30% if prevailing wage and apprenticeship requirements are met (or if the facility is under 1 MW AC). Additional bonus credits include:
- +10 percentage points for meeting domestic content requirements on steel, iron, and manufactured products.
- +10 percentage points for siting in an "energy community" (brownfields, fossil-fuel-dependent areas, or closed coal communities).
- Up to +10 or +20 points under the Low-Income Communities Bonus Credit program for qualifying solar and wind facilities.
The IRA also introduced direct pay (§6417) for tax-exempt entities and transferability (§6418), letting developers sell credits to unrelated taxpayers for cash. Final Treasury regulations were published in January 2025. The credit begins to phase out the later of 2032 or when U.S. electric-sector greenhouse-gas emissions fall to 25% of 2022 levels.
Example
In 2025, a utility-scale solar developer in West Virginia structured its 200 MW project to claim the §48E credit at 30%, plus a 10-point energy community adder for siting on a former coal mine, and transferred the credit to a corporate buyer under §6418.
Frequently asked questions
§48 listed specific eligible technologies and was scheduled to sunset; §48E is technology-neutral, applies to any zero-emissions generation or storage placed in service after 2024, and phases out based on sector-wide emissions targets.
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