A federal income tax credit for certain types of renewable and clean energy projects. The ITC has been revised multiple times since 1992, most recently in August 2022 under the Inflation Reduction Act (IRA) (P.L. 117-169, 136 Stat. 1818 (2022)) which made several changes to the Internal Revenue Code (I.R.C. or Code).

As revised, the ITC is available for:

The IRA also expands the range of property that qualifies for the credit to include microgrid controllers, biomass, dynamic glass, and linear generators and extends the advanced energy project credit for investments in projects that reequip, expand, or establish certain energy manufacturing facilities (I.R.C. § 48C).

The ITC may be increased five-fold if the project meets certain prevailing wage and apprenticeship requirements. This credit may also be increased if the project:

For more information on these credits, see Legal Updates, Inflation Reduction Act: Key Energy Provisions and IRS Issues Guidance on Domestic Content Requirements for Credits Under Sections 45, 45Y, 48, and 48E of the Tax Code and Practice Note, Transferability and Direct Pay Provisions for Clean Energy Projects Under the Inflation Reduction Act and Article, Biden Administration Energy and Climate Change Policies and Regulations: 2023 Tracker: IRS.

For more information on the ITC and renewable energy generally, see Practice Notes: