Are you eligible for IRA energy tax credits?

The Inflation Reduction Act (IRA) energy tax credits package can benefit businesses, organizations, and institutions across various industries, not just renewables and energy. Here are a few questions to consider to determine the credits for which you may qualify.

Is your organization considering any of the following?

Installing or investing in renewable electricity

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Installing or investing in renewable electricity

The Section 45 production tax credit (PTC) offers a 2.75 cents per kilowatt credit (adjusted for inflation) for electricity produced for 10 years after facility is placed in service.

The Section 48 investment tax credit (ITC) offers a credit of 30% of basis when the property is placed in service.

Energy-efficient improvements to a building or a property

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Energy-efficient improvements to a building or a property

Section 179D allows taxpayers to expense rather than capitalize up to $5 per square-foot for the cost of making energy-efficient improvements to a building, including HVAC, lighting and building envelope functions. Tax-exempts can allocate the credit to a designer (typically for a rebate or fee reduction). The property must be certified by an engineer using approved software.

Installing EV charging stations

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Installing EV charging stations

Section 30C provides a credit of 30% for the costs of installing EV charging stations up to $100,000 per item of property, but it is only available in specific geographies.

Buying electric vehicles

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Buying electric vehicles

Section 45W offers a 30% credit (15% if hybrid) of up to $7,500 per EV under 14,000 pounds or up to $40,000 per EV over 14,000 pounds but capped at the incremental cost of a comparable gas or diesel vehicle. There are no mineral or battery sourcing requirements.

Manufacturing and sale of renewable energy components

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Manufacturing and sale of renewable energy components

Section 45X provides a credit for manufacturing and selling specific components for inverters, solar panels, wind projects and batteries, as well as for producing certain critical minerals. The credit is generally a fixed rate per component, though several are based on capacity, and electrode-active materials and critical minerals are based on production costs.

Renewable tech component manufacturing investments

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Renewable tech component manufacturing investments

Section 48C offers a 30% credit for the cost of investments in manufacturing capacity for a variety of energy technologies (it is also available for reducing carbon emissions at an existing facility by 20%). It is available for a broader range of technologies than the Section 45X credit, but taxpayers must apply in a very competitive process for a limited allocation.

Reducing greenhouse gas emissions by 20%

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Reducing greenhouse gas emissions by 20%

Installing a property to produce hydrogen

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Installing a property to produce hydrogen

Section 45V provides a per- kilogram credit for hydrogen production that meets certain lifecycle greenhouse gas emissions standards for 10 years after the facility is placed in service. Taxpayers can alternatively elect to take a 30% ITC under Section 48.

Installing a carbon-capture property

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Installing a carbon-capture property

Section 45Q provides a per-metric- ton credit based on the amount of carbon captured and permanently sequestered in the 12 years after carbon-capture equipment is placed in service.