General
Tax credits are available to corporations, business owners, project developers, and more to invest in the clean energy economy and technology. Along with encouraging private investments in the energy sector, these tax credits incentivize businesses not previously involved with or using clean energy to consider new investments. Relevant tax credits available to private business owners include:
- Deductions for energy-efficient commercial buildings
- Credits for qualifying commercial clean vehicles
- A two-year extension on investment tax credits (ITC) and production tax credits (PTC) to bridge the gap until the new, technology-neutral clean energy tax credit system begins in 2025
Overall, the IRA provides a significant opportunity for private business owners to get involved or invest in clean energy and puts many businesses’ climate goals within reach.
Most Common Tax Credits for Commercial Entities
The table below lists some of the most common tax credits utilized by commercial entities, from project developers of renewable energy systems to producers of sustainable aviation fuel. Keep in mind that bonus credits, also known as bonus adders, can increase the tax credit amount if the project meets certain location-based or prevailing wage & apprenticeship standards.
| Tax credit | Available for the Specified tax years |
|---|---|
|
Renewable Energy Investment Tax Credit (ITC) (§48) |
Up to 30% credit for certain renewable energy projects, with bonus credits for domestic content and low-income areas. For more information, visit here. |
|
Production Tax Credit (§45) |
Per-kilowatt-hour credit for renewable energy production (e.g., wind, solar). For more information, visit here. |
|
Clean Electricity Investment Credit (§48E (effective for facilities beginning construction after December 31, 2024)) |
Credit for investments in zero-emission electricity generation and storage technologies. For more information, visit here. Modification: Commercial solar/ wind projects must start construction by 07/04/2026 or be placed in service by 12/31/2027. Other technologies, including storage, geothermal, hydro, and nuclear, phase out begins for projects beginning construction in 2034. |
|
Clean Vehicle Credit for Businesses (§45W) |
Credit for purchasing light-duty ($7,500) or heavy-duty ($40,000) clean commercial vehicles. For more information, visit here. New termination date: Will be terminated effective September 30, 2025. |
|
Alternative Fuel Vehicle Refueling Property Credit (§30C) |
Credit that allows 30% for individuals, up to $1,000. For commercial projects, including by multifamily landlords and managers, is 30% per charger, up to $100,000 per charger. For more information, visit here. New termination date: Will be terminated effective June 30, 2026. |
|
Advanced Energy Project Credit (§48C) |
Credit for investments in advanced energy manufacturing and retooling facilities. For more information, visit here. Modification: Stricter enforcement of certification, placed-in-service deadlines, and elimination of the credit reallocation mechanism |
|
Carbon Capture and Sequestration Tax Credit (§45Q) |
Credit for capturing and sequestering carbon dioxide. For more information, visit here. Note: The OBBB puts all use cases on equal footing so that both enhanced oil recovery and commercial utilization can qualify for a credit of up to $85 per metric ton (or more in the case of direct air capture). |
|
Energy Efficiency Commercial Buildings Deduction (§179D) |
Deduction for energy-efficient improvements to commercial buildings. For more information, visit here. New termination date: Construction begun after June 30, 2026, is ineligible. |
|
Clean Hydrogen Production Tax Credit (§45V) |
Credit for producing clean hydrogen based on carbon intensity standards. For more information, visithere. New termination date: Construction begun after June 30, 2026, is ineligible. |