IRC §48 · investment credit

Section 48: selling the Energy Credit (legacy ITC)

The original investment tax credit. New projects now use §48E, but §48 still covers property that began construction before 2025, and geothermal heat pumps until 2035.

Verified 11 Oct 2026 · Instructions for Form 3468 (2025)

Who still earns it

The §48 energy credit is a percentage of the basis of energy property placed in service during the year: solar, fuel cells, energy storage, geothermal, small wind, waste energy recovery, qualified biogas, microgrid controllers and others listed in the statute^[1].

For most of that property, construction must have begun before 1 January 2025^[1]. Projects that started later use the technology-neutral §48E. The main exception is ground-source (geothermal) heat pump property, which stays under §48 if construction begins before 1 January 2035^[1].

So in 2026, §48 credits for sale typically come from projects that began construction before 2025 and were placed in service in 2025 or 2026.

Rate and bonus amounts

The energy percentage is 6%, or 30% where the project meets the prevailing wage and apprenticeship requirements or is under 1 MW^[1]. Energy-community and domestic-content bonuses can add to that where their own requirements are met. A buyer must receive a proportionate share of every bonus amount^[2].

Selling it

For a small solar project, see selling a small solar tax credit.

1. Register the property with the IRS after it is placed in service; each property needs its own number^[3]. Allow at least 120 days before the return’s due date^[4].
2. Claim on Form 3468, Part VI, which has its own sections for each type of energy property^[5], and report the transfer in Form 3800, Part III, column (f)^[6].
3. Attach the transfer election statement to the original return^[7].

What buyers ask for on a §48 deal: proof that construction began before 2025 (or before 2035 for heat pumps); cost-basis support, usually a cost-segregation report; placed-in-service evidence; prevailing wage and apprenticeship records for the 30% rate; and bonus evidence.

Recapture. If the property is sold or stops qualifying during the five-year recapture period, the buyer bears the recapture and the seller must tell the buyer^[8][9]. Expect the buyer to ask for an indemnity, insurance or both, and expect investment credits to price a few cents below production credits.

Common mistakes

• Filing in Part V. Part V of Form 3468 is §48E; §48 belongs in Part VI^[5].
• No begin-construction file. For a project placed in service in 2025 or later, the begin-construction evidence is what keeps it under §48 at all.
• Late or amended-return elections, which are not allowed^[7].

Frequently asked questions

Are §48 credits transferable?

Yes. The energy credit determined under §48 is an eligible credit under §6418^[8].

Which part of Form 3468 is used for a §48 credit?

Part VI, “Energy Credit Under Section 48”^[5].

Does the foreign-entity transfer bar apply to §48?

The statutory bar on transfers to specified foreign entities names §§45Q, 45U, 45X, 45Y, 45Z and 48E, not §48^[8].

Market price

About $0.895 on average in 2026; $0.92 to $0.95 for investment-grade sellers. Recapture and basis risk explain the discount to production credits.^{[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 §48

1. 31 Dec 2024
   Last day to begin construction under §45 and most of §48

   Facilities and most energy property must have begun construction before 1 January 2025 to use the legacy credits. Later projects use §45Y or §48E.
2. 31 Dec 2034
   §48 geothermal heat pumps: construction must begin before 2035

   Ground-source heat pump property remains eligible under §48 if its construction begins before 1 January 2035.