IRC §48E · investment credit

Section 48E: selling the Clean Electricity Investment Credit

The technology-neutral investment credit for clean power and storage placed in service from 2025: what it pays, what changed in 2025, and what a buyer will ask you for.

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

Who earns it and how it is measured

The credit belongs to the owner of a qualified facility or of energy storage technology placed in service after 2024^[1]. A qualified facility generates electricity with a greenhouse-gas emissions rate of zero or less, whatever the technology; storage qualifies on its own, with no generator attached.

The credit is a percentage of the qualified investment, broadly the basis of the property placed in service that year. The base rate is 6%. It rises to 30% when the project meets the prevailing wage and apprenticeship requirements, or has a maximum net output under 1 MW (AC)^[1]. The credit is claimed once, in the year the property is placed in service, and is subject to a five-year recapture period.

A facility cannot take both credits: §45Y excludes any facility for which §48E has been allowed^[2]. Choose between the investment credit (§48E) and the production credit (§45Y) before you register.

Bonus amounts and the documents that prove them

On the 30% rate, two bonuses can each add up to 10 percentage points^[1]:

• Energy community. The facility is located in an energy community as the statute defines it. Keep the location analysis the bonus relies on.
• Domestic content. Steel, iron and manufactured products meet the domestic-content thresholds. Keep the supplier certifications and the cost analysis.

A separate low-income communities bonus is awarded through an allocation program; the allocation letter is the evidence.

When you sell, every buyer must receive a proportionate share of each bonus. You cannot sell the base credit to one buyer and the bonus to another^[3].

Selling it

The general steps are on how a transfer works and pre-filing registration; for a small solar project, see selling a small solar tax credit. For §48E specifically:

1. Register the facility with the IRS after it is placed in service. Each property needs its own registration number^[4], and the IRS asks you to register at least 120 days before your return is due, extensions included^[5].
2. Claim the credit on Form 3468, Part V^[6], and report the transfer on Form 3800, Part III, column (f), as a negative amount; the buyer enters the same amount as a positive number on its own Form 3800^[7].
3. Attach the transfer election statement, signed by both sides, to your original return. A transfer election cannot be made for the first time on an amended return, and late-election relief is not available^[8].

What buyers ask for on a §48E deal:

• cost-basis support, usually a cost-segregation report;
• placed-in-service evidence, such as commissioning and permission-to-operate records;
• prevailing wage and apprenticeship records (payroll, apprentice hours) if you claim 30%;
• the evidence behind each bonus;
• for construction that began after 31 December 2025, the material-assistance analysis (see below);
• for wind and solar, the begin-construction evidence.

Recapture sits with the buyer. If the property is disposed of, or stops qualifying, within the recapture period, the buyer owes the recapture and you must notify the buyer^[9][10]. This is why buyers price §48E below production credits and ask for an indemnity, insurance or both. The basis reduction for the credit still applies to you as owner, as if you had claimed it yourself^[9].

What changed in 2025

• Wind and solar cliff. Property that is part of a wind or solar facility earns no §48E credit if it is placed in service after 31 December 2027, unless the facility’s construction began on or before 4 July 2026^[1]. For facilities that had not begun construction before 2 September 2025, only the physical work test can show that construction began; the 5% cost safe harbor survives only for solar facilities of 1.5 MW (AC) or less^[11].
• Storage is treated separately. The cliff is written for property that is part of a wind or solar facility; energy storage technology is a separate category in the statute and is not named in that termination^[1].
• Material assistance from prohibited foreign entities. Facilities and storage whose construction begins after 31 December 2025 lose the credit if their material-assistance cost ratio falls below the statutory threshold^[1]: 40% for facilities and 55% for storage that begin construction in 2026, rising each year^[12]. Notice 2026-15 gives interim safe harbors for the calculation^[13].
• No transfers to a specified foreign entity for tax years beginning after 4 July 2025^[9].
• Phase-down after 2032. Other technologies keep the full credit for construction beginning through 2033, then 75% (2034), 50% (2035) and nothing after^[1].

Common mistakes

• Registering late. Without a registration number on the original return, the election fails for that property^[4].
• Assuming registration means approval. A registration number does not, by itself, make the credit transferable^[4].
• Paying in anything but cash, or outside the payment window that ends on the due date of the transfer election statement^[3].
• Selling to a related party. The buyer must not be related under §267(b) or §707(b)(1)^[9].
• Using the wrong part of Form 3468. Part V is §48E; Part VI is the legacy §48 credit^[6].

Frequently asked questions

Is §48E transferable?

Yes. The clean electricity investment credit is on the §6418 list of eligible credits^[9].

Form 3468 Part V or Part IV?

Part V is §48E. Part IV is the §48D advanced manufacturing investment credit, a semiconductor credit^[6] that is not on the §6418 transfer list^[9].

Is §48E a capped or “fully funded” program?

No. Any taxpayer that meets the requirements can claim it; only the low-income communities bonus is awarded by allocation^[1].

When can the buyer use the credit?

In the buyer’s first tax year ending with, or after, the seller’s tax year in which the credit was determined^[9].

Can standalone battery storage qualify?

Yes, energy storage technology is eligible on its own, with its own material-assistance threshold for construction beginning after 2025^[1][12].

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 §48E

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.