Clean Electricity Investment Credit

The Clean Electricity Investment Credit is a newly established, tech-neutral investment tax credit that replaces the Energy Investment Tax Credit once it phases out at the end of 2024. This is an emissions-based incentive that is neutral and flexible between clean electricity technologies.

The credit is available to taxpayers with a qualified facility and energy storage technology placed in service after Dec. 31, 2024. The Clean Electricity Investment Credit phase-out starts for the later of 2032 or when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower.

The base amount of the Clean Electricity Investment Credit is 6 percent of the qualified investment. Credit is increased by up to:

5 times or up to 30% for facilities meeting prevailing wage and registered apprenticeship requirements.
10-percentage points for facilities meeting certain domestic content requirements for steel, iron and manufactured products.
10-percentage points if located in an energy community.

The Clean Electricity Investment Credit is eligible for direct payment or transfer. Taxpayers cannot claim both investment credit and production credit for the same facility.

Who can claim the credit

Taxpayers with a qualified facility and energy storage technology placed in service after Dec. 31, 2024 may claim the credit.

Elective payment and transfer of credits may be available to certain applicable entities to include tax-exempt organizations and government entities. A pre-filling registration is required for elective payments and transfers.

How to claim the credit

Taxpayers will need to complete Form 3468, Investment Credit and file it with the taxpayer’s annual return submitted to the IRS for the first taxable year in which the taxpayer reports a clean energy investment credit.