Section 13101 of the IRA extends and expands the production tax credit for renewable electricity production in section 45 of the Internal Revenue Code (“IRC”). The credit is available for the production of energy from “qualified” resources, including wind, solar, geothermal, closed- and open-loop biomass, and municipal solid waste.
Previously, the production tax credit was only available for wind energy facilities that commenced construction prior to January 1, 2022. Section 13101 of the IRA extends the “commence construction” window for wind energy facilities to January 1, 2025.
The IRA also increases the amount of the credit from a base rate of 0.3 cents per kilowatt hour of electricity produced to 0.5 cents per kilowatt hour. The IRA establishes a higher credit, of 2.5 cents per kilowatt hour, for projects that meet certain wage and apprenticeship requirements. The credit can also be further increased if a project meets domestic content requirements or is located in an “energy community,” defined as brownfield site, an area with employment significantly related to the fossil fuel industry, or a census tract (or immediately adjacent census tract) in which a coal mine has closed or a coal-fired electric generating unit has been retired.
The Treasury Department is required to issue “regulations or other guidance” to implement the expanded production tax credit program.
For facilities placed in service after 2024, the new section 45Y clean electricity production tax credit created by IRA section 13701 provides a continued production tax credit.
Eligible Entities:
Current Status:
Trump Administration Actions:
Implementation Status at End of Biden Administration:
Biden Administration Actions:
- Treasury Releases Guidance on Domestic Content Bonus for Clean Energy Credits [01/16/2025]
- Treasury Extends Transitional Process for Claiming Exceptions to Domestic Content Bonus Requirements [11/22/2024]
- Treasury Finalizes Prevailing Wage and Apprenticeship Requirements for a Variety of Tax Incentives [06/18/2024]
- Treasury Publishes Guidance on Energy Community Bonus Credit [06/07/2024]
- Treasury Releases Guidance on Domestic Content Bonus Safe Harbor [05/16/2024]
- Treasury Issues Proposed Rule on Clean Energy Apprenticeship and Prevailing Wage Requirements [08/30/2023]
- IRS Releases 2023 Section 45 Production Tax Credit Amounts [06/21/2023]
- Treasury Releases Updated Guidance on Energy Community Bonus Credit [06/15/2023]
- Treasury Releases Guidance on Domestic Content Bonus for Clean Energy Investment and Production Credits [05/12/2023]
- Treasury Issues Guidance on Energy Community Bonus Credit [04/04/2023]
- Treasury Issues Initial Guidance on Prevailing Wage and Apprenticeship Requirements [11/30/2022]
- Treasury Issues 2022 Renewable Electricity Production Credit Amounts [11/28/2022]
- Treasury Requests Comments on Prevailing Wage, Apprenticeship, Domestic Content, and Energy Community Requirements [10/05/2022]
- Treasury Requests Comments on Five Clean Energy Tax Credit Programs [10/05/2022]
Litigation:
In Oregon Environmental Council v. IRS (filed December 18, 2025), several groups sued to challenge new IRS guidance on the meaning of “beginning of construction” for wind and solar tax credit eligibility as arbitrary and capricious in violation of the Administrative Procedure Act. The guidance strips the 5% safe harbor for solar and wind projects, which had previously been applied to IRA tax credits in guidance issued in 2022.
Program Stakes:
A Congressional Budget Office report estimates that taxpayers will claim $11.9 billion in Renewable Energy Production Tax Credits through 2026 and a total of $51 billion on these Section 45 credits by 2031.