IRC §45Y · production credit

Section 45Y: selling the Clean Electricity Production Credit

The technology-neutral production credit for clean power from facilities placed in service in 2025 or later, sold one facility and one year at a time.

Verified 11 Oct 2026 · IRS Form 7211, Clean Electricity Production Credit

Who earns it and how it is measured

The credit is earned on each kilowatt-hour produced at a qualified facility placed in service after 2024, whose greenhouse-gas emissions rate is zero or less, and sold to an unrelated person^[1]. The technology does not matter; the emissions rate does.

The base amount is 0.3¢ per kWh, and 1.5¢ (five times the base) when the facility meets the prevailing wage and apprenticeship requirements; both figures are adjusted for inflation each year^[1]. The credit runs for 10 years from the date the facility is placed in service.

A facility gets one credit or the other: §45Y does not apply to a facility for which §45, §45Q, §45U, §48 or §48E has been allowed^[1].

Bonus amounts and the documents that prove them

Located in an energy community, or built with qualifying domestic content, the facility earns a 10% increase for each^[1]. Keep the location analysis and the domestic-content certifications with the facility file; a buyer will ask for both. A buyer must receive a proportionate share of any bonus amount; bonuses cannot be sold separately from the base credit^[2].

Selling it

A production credit is sold separately for each facility and each tax year of the 10-year period^[3]. That makes §45Y flexible: you can sell this year’s credits now and decide on later years later, or sign a multi-year agreement (a “PTC strip”); Crux counted nearly $9 billion of long-term strips bought in 2025^[4].

1. Register each facility with the IRS and renew the registration for each year in which you elect to transfer^[5]. The IRS asks for registration at least 120 days before the return’s due date, extensions included^[6].
2. Claim on Form 7211^[7] and report the transfer on Form 3800, Part III, column (f)^[8].
3. Attach the transfer election statement to an original, timely return; the election cannot be added on an amended return^[9].

What buyers ask for on a §45Y deal: metered production and sales records; the emissions-rate basis for the technology; prevailing wage and apprenticeship records if you claim the 1.5¢ rate; bonus evidence; and, for construction that began after 31 December 2025, the material-assistance analysis. Because there is no recapture on a production credit, §45Y generally prices above investment credits.

What changed in 2025

• Wind and solar cliff. A wind or solar facility placed in service after 31 December 2027 earns no §45Y credit, unless its construction began on or before 4 July 2026^[1]. Construction that had not begun before 2 September 2025 must meet the physical work test; the 5% safe harbor remains only for solar of 1.5 MW (AC) or less^[10].
• Material assistance. A facility whose construction begins after 31 December 2025 is not a qualified facility if it includes material assistance from a prohibited foreign entity^[1], measured against a cost-ratio threshold that starts at 40% for 2026^[11].
• No transfers to a specified foreign entity for tax years beginning after 4 July 2025^[3].
• Phase-down. For other technologies the “applicable year” is now fixed at 2032: full credit for construction beginning in 2033, 75% in 2034, 50% in 2035, nothing after^[1].

Common mistakes

• Claiming §45Y on Form 8835. Form 8835 is for the legacy §45 credit^[12]; §45Y production sold after 2024 goes on Form 7211^[7].
• Forgetting the annual renewal of the registration number for each year you sell^[5].
• Selling more than the facility produced. If the buyer claims more than the credit actually determined, the excess is an excessive credit transfer: the buyer repays it plus a 20% penalty unless it shows reasonable cause^[3].

Frequently asked questions

Can you use Form 8835 to claim a §45Y credit?

No. The IRS form for §45Y is Form 7211, “Clean Electricity Production Credit”^[7].

Can I sell several years at once?

The election is made year by year, but nothing stops a seller and buyer agreeing today on future years’ credits; the cash for each year must still be paid within that year’s payment window^[2].

Is §45Y on the §6418 list?

Yes, the clean electricity production credit is an eligible credit^[3].

Market price

About $0.917 on average in 2026; $0.92 to $0.96 for investment-grade sellers.^{[Cenet Capital]}

Market estimate, not an offer. Prices move with buyer demand, deal size, seller credit quality, insurance and foreign-entity exposure. Run your own figures in the Credit Value Estimator, or compare every published report on the prices page.

Deadlines for §45Y

1. 4 Jul 2025
   No transfers of these credits to a specified foreign entity

   For tax years beginning after 4 July 2025, credits under §§45Q, 45U, 45X, 45Y, 45Z and 48E may not be transferred to a specified foreign entity.
2. 2 Sep 2025
   Stricter begin-construction test for wind and solar

   For wind and solar facilities that had not begun construction before 2 September 2025, only the physical work test can establish the start of construction; the 5% cost safe harbor survives only for solar facilities of 1.5 MW AC or less.
3. 31 Dec 2025
   Material-assistance test applies to construction starting after this date

   Facilities and storage whose construction begins after 31 December 2025 get no §45Y or §48E credit if they include material assistance from a prohibited foreign entity (cost-ratio thresholds start at 40% for facilities and 55% for storage in 2026).
4. 4 Jul 2026
   Wind and solar: last day to begin construction without the 2027 cliff

   Wind and solar facilities whose construction began on or before 4 July 2026 are not subject to the 31 December 2027 placed-in-service deadline (Notice 2025-42's continuity safe harbor gives four calendar years after the year construction began).
5. 31 Dec 2027
   Wind and solar started after 4 July 2026 must be in service by this date

   A wind or solar facility whose construction began after 4 July 2026 earns no §45Y or §48E credit unless it is placed in service by 31 December 2027.
6. 31 Dec 2032
   §45Y and §48E phase down for construction starting after 2032

   Non-wind, non-solar facilities beginning construction in 2033 get 100% of the credit, in 2034 75%, in 2035 50%, and nothing after.