Less than 1 MW(ac)
The IRA will provide 30% funding for solar and wind installations of less than 1 MW(ac) on commercial facilities, with no maximum allowance. The 30% credit also applies to battery storage and interconnection charges. 

• The incentive is a 30% tax credit for a for-profit business that files tax returns.
• The incentive is a 30% Direct Pay from the US Treasury for nonprofits and public entities.
• Projects can earn additional credit for:
  • Domestic content minimums (10%) 
  • Brownfield or an energy community (10%)
  • Low Income Community (10 - 20%) This is a separate provision and will require a separate application, subject to annual maximum of 1.8GWac/year and other provisions. Projects must apply for and receive notice of bonus allocation before the project is complete.  
• The total credit is reduced by up to 15% for projects funded via tax-exempt bonds (which applies mostly to local governments and school districts).  
  • For example: solar project funded wholly via tax-exempt bonds that meets domestic content criteria would qualify for a total credit of 34% [which is 30% + 10% - (15% x 40%) = 34%] 
• In general, the eligible project amount is not affected by tax-exempt grants or incentives from entities like Focus on Energy; consult your tax professional and see the US Department of Energy guidance for more information
• Credits are in effect 2023 - 2032

Refer to Department of Energy summary for more information on the Investment Tax Credit for solar energy projects.  

More about transitioning your organization to renewable energy is here. 

1 MW or Larger 

Systems that are 1MW (ac) or larger are eligible for a 6% Elective Pay Credit; that credit increases to 30% if the project meets Prevailing Wage and Apprenticeship requirements. 

Additionally, beginning in 2024 there is a penalty for Elective Pay Credit projects over 1MW(ac) that do not meet the Domestic Content requirements. In 2024 the penalty is 10%, which increases to 15% in 2025. Beginning in 2026 projects over 1MW(ac) that do not meet Domestic Content requirements are not eligible for Elective Pay. 

More about transitioning your organization to renewable energy is here. 

Less than 1 MW(ac)

With the Investment Tax Credit entities can receive a 30% credit for geothermal installations and other renewable energy installations, including biogas.

• The incentive is a 30% tax credit for a for-profit business that files tax returns
• The credit is 30% for tax-exempt entities that utilize Elective Pay.
• Projects can earn additional credit if:
  • Domestic content minimums (10%) 
  • Brownfield or an energy community (10%)
  • There is no low-income bonus for geothermal projects.
• The total credit is reduced by up to 15% for projects funded via tax-exempt bonds, generally applies to local governments and school districts.
  • For example: solar project funded wholly via tax-exempt bonds that meets domestic content criteria would calculate their credits as:

                             (30% + 10%) - (15% x 40%) = 34%

• In general, the eligible project amount is not affected by tax-exempt grants or incentives from entities like Focus on Energy; consult your tax professional and see the US Department of Energy guidance for more information

Over 1 MW(ac)

If a renewable energy installation is over 1MW(ac) the Elective Pay credit is 6%; if prevailing wage and apprenticeship requirements are met the Elective Pay increases to 30%. 

In situations where a facility is adding both solar and geothermal, the two systems might be considered parts of one whole (in which case the combined system must be under 1 MW(ac) or meet the prevailing wage requirements to receive the 30% credit) or be considered two separate clean energy projects (in which case the 1 MW(ac) maximum applies to each project). The consideration will depend on how the project is scoped and contracted. Refer to IRS guidance for more information for more details. 

Additionally, beginning in 2024 there is a penalty for Elective Pay Credit projects over 1MW(ac) that do not meet the Domestic Content requirements. In 2024 the penalty is 10%, which increases to 15% in 2025. Beginning in 2026 projects over 1MW(ac) that do not meet Domestic Content requirements are not eligible for Elective Pay. 

Under the IRA tax-exempt entities can receive Elective Pay credits to offset the costs of purchasing electic vehicles (EVs) and, in some cases, EV charging infrastructure.

The IRA includes separate provisions for clean fuel tax credits for consumers and businesses. Although the consumer credits include specifications around vehicle components, businesses are not subject to this provision. That means tax-exempt entities can claim the Elective Pay credit on a wider array of models than consumers can. 

For qualified commercial clean vehicles, the credit equals the lesser of:

• 15% of the entity’s tax basis in the vehicle (30% if the vehicle is not powered by gas or diesel); or
• The incremental cost of the vehicle. Incremental cost is the excess of the purchase price of a qualified commercial clean vehicle over the price of a comprable vehicle

The maximum credit is $7,500 for qualified vehicles with gross vehicle weight ratings (GVWRs) of under 14,000 pounds and $40,000 for all other vehicles. The credit applies to road vehicles as well as mobile machinery, as defined in § 4053(8) of the Code. There is no limit on the number of credits your business can claim and elective pay is available for tax-exempt entities.

Vehicles That Qualify:

• Must be made by a qualified manufacturer;
• Be for use in business, not resale, and for use primarily in the United States; and
• Have not been allowed a credit under section 30D (individual credit) or 45W (fleet credit) previously.
• The vehicle must also be either:
  • A plug-in electric vehicle that draws significant propulsion from an electric motor with a battery capacity of at least 7 kilowatt hours if the gross vehicle weight rating (GVWR) is under 14,000 pounds or 15 kilowatt hours if the GVWR is 14,000 pounds or more; or
  • A fuel cell motor vehicle that satisfies the requirements of IRC 30B(b)(3)(A) and (B), which defines a "fuel cell motor vehicle" as one that
    • (A) which is propelled by power derived from 1 or more cells which convert chemical energy directly into electricity by combining oxygen with hydrogen fuel which is stored on board the vehicle in any form and may or may not require reformation prior to use,
    • (B) which, in the case of a passenger automobile or light truck, has received on or after the date of the enactment of this section a certificate that such vehicle meets or exceeds the Bin 5 Tier II emission level established in regulations prescribed by the Administrator of the Environmental Protection Agency.

See also FAQs for the Commercial Clean Vehicle Credit

Vehicle Charging

Some tax-exempt entities that install EV chargers and station equipment at their property can qualify for a tax credit of up to 6% of the cost of charging equipment (or 30% if prevailing wage and apprenticeship requirements are met), up to a maximum credit of $100,000 per unit. Projects completed before December 31, 2022 are subject to the prior $30,000 cap.

Qualifying for Vehicle Charging Credits

To qualify, the equipment must be placed in a low-income community or a non-urban area. The US Treasury issued guidance details which areas are eligible; use this Department of Energy map to determine your individual eligibility.

Review the IRS guidelines for all of the specifics about this credit.