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Investment Tax Credit
What is the 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.
The base credit for the Investment Tax Credit (ITC) is 6%, with adders, such as meeting prevailing wage and apprenticeship requirements, or qualifying for domestic content, energy community, and low-income bonuses, you could get 30 - 70% of your project paid for through credits.
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.
Who is Eligible?
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For Profit Entities: Corporations, partnerships, and individuals with U.S. federal tax liability who can claim ITC directly on their federal tax return.
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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):
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States (including DC), counties, cities, and other political subdivisions such as school districts.
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Indian Tribal governments, political subdivision thereof, or any agency or instrumentality of a Tribal government.
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Alaska Native Corporations, the Tennessee Valley Authority, rural electric cooperatives.
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Technologies include:
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Solar
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Wind
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Geothermal
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Energy Storage
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Combined Heat and Power (CHP)
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Fuel Cells
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Waste Energy Recovery
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Biogas
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Microgrid Controllers