Guide · choosing a route

Sell the credit, keep it, or something else?

A §6418 sale is one of five ways to turn a clean-energy credit into value. Which one fits depends on your tax bill, your size and who you are. Here they are side by side, with the rule that catches people in each.

Verified 11 Oct 2026 · page reviewed 11 Oct 2026

The five routes at a glance

Sources for each row are in the sections below.

Use it yourself

If you owe federal income tax, the credit reduces it dollar for dollar, within the limits on general business credits^[1]. No discount, no buyer, no fees. The limits and, for individuals and some closely held companies, the passive activity rules decide how much you can use in a year; that is a question for your tax adviser.

Carry it back or forward

For these clean-energy credits, any amount you cannot use is carried back three years and forward twenty^[1]. That preserves the value, but it waits on future tax bills.

The catch: only current-year credits can be sold. A carryforward or carryback cannot be transferred^[2]. If you might want to sell, decide before you file the return for the year the credit arises: the election has to be made on that original return, and cannot be made for the first time on an amended one^[3].

Sell it under §6418

You sell all or part of the credit to an unrelated buyer for cash; the buyer is then treated as the taxpayer for that credit, and the cash is not income to you^[2]. Most credits sell for about 88 to 96 cents per dollar; small, uninsured deals for 80 to 89^[4]. The steps are on how a transfer works, and the numbers on the prices page.

A sale moves only the credit. You keep the project. For §48, §48C and §48E property, its basis is still reduced as if you had claimed the credit yourself^[5].

Tax equity

In a tax equity deal, such as a partnership flip, an investor co-owns the project and is allocated a share of its cash and most of its tax benefits^[6]. These structures are complex to set up and manage, the combined legal, diligence and accounting costs can exceed $1 million for a single deal, and two major banks have provided more than half of tax equity in recent years^[6]. For a large project it can still be the right answer, because the investor takes the tax benefits beyond the credit.

Tax equity is not standing still: Crux expects hybrid tax equity structures to account for about $28.8 billion in 2026^[7].

IRS direct pay (§6417)

Direct pay treats the credit as a payment of tax, so the IRS pays out the full amount. It is open to^[8]:

• tax-exempt organisations;
• states and their political subdivisions;
• the Tennessee Valley Authority;
• Indian tribal governments;
• Alaska Native Corporations;
• rural electric co-operatives.

Any other business can elect direct pay for only three credits: §45V clean hydrogen, §45Q carbon capture and §45X manufacturing. The election covers the first year and the four years after it, ending before 1 January 2033, and for all three no transfer election is allowed for that credit in the years it covers. A business can revoke the election for the later years, but cannot undo the revocation^[8].

A short decision path

1. Do you owe enough federal income tax to use the credit this year? If yes, compare using it with the after-cost price of a sale. Using it avoids the discount.
2. Are you a tax-exempt or public body, or do you have a §45V, §45Q or §45X credit? Look at direct pay before a sale.
3. Is the project large, with a sponsor that wants an investor partner? Tax equity, or a hybrid, may beat a straight sale.
4. Otherwise, a §6418 sale turns the credit into cash this year. Check what a buyer will ask for with the Readiness Checker and what the credit may fetch with the Credit Value Estimator.