The Clean Electricity Production Credit is a newly established, tech-neutral production tax credit that replaces the Energy Production 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 Production 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 credit starts at a base rate of 0.3 cents per kilowatt hour of electricity produced at a qualified facility and sold to an unrelated person. A higher base rate (1.5 cents) applies to small facilities, with a maximum output of less than 1 megawatt, that meet certain prevailing wage and registered apprenticeship requirements. The rate will be adjusted for inflation. 10-percent increase for facilities meeting certain domestic content requirements for steel, iron and manufactured products. 10-percent increase if located in an energy community. The Clean Electricity Production 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 Qualified facility owners (or operators under certain circumstances) can claim an annual credit for a specified period based on one of the following: Kilowatt hours of clean energy a qualified facility generates Metric tons of qualified carbon oxide captured and sequestered Kilograms of qualified clean hydrogen produced at a qualified facility and sold or used Elective payment and transfer of credit 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 the appropriate form for the specific production credit they are claiming. See Forms and publications. News releases IR-2023-22, Treasury and IRS issue proposed regulations defining energy property, Nov. 17, 2023 IR-2022-193, IRS seeks comments on upcoming energy guidance, Nov. 3, 2022 Law and guidance Notice 2023-38, Domestic Content Bonus Credit Guidance under Sections 45, 45Y, 48 and 48E Notice 2023-29, Energy Community Bonus Credit Amounts under the Inflation Reduction Act of 2022 Notice 2022-51, Request for comments on prevailing wage, apprenticeship, domestic content, and energy communities requirements Notice 2022-49, Request for Comments on Certain Energy Generation Incentives Forms and publications Clean Energy Tax Incentives for Business, Publication 5886 PDF About Form 8835, Renewable Electricity Production Credit About Form 7210, Clean Hydrogen Production Credit About Form 7211, Clean Electricity Production Credit (form pending) About Form 7213, Nuclear Power Production Credit About Form 8849, Claim for Refund of Excise Taxes Schedule 3 (includes Safe Aviation Fuel Production Credit) About Form 7218, Clean Fuel Production Credit: (form pending) About Form 7207, Advanced Manufacturing Production Credit About Form 8933, Carbon Oxide Sequestration Credit Related Prevailing wage and registered apprenticeship Domestic content bonus credit Energy Communities Frequently asked questions for energy communities Elective pay and transferability
