Section 13102 of the IRA extends and expands the investment tax credit for qualifying energy facilities in section 48 of the IRC. The investment tax credit was previously scheduled to phase out between 2019 and 2023. Section 13102 of the IRA provides that projects that begin construction prior to January 1, 2025 (or January 1, 2035 for geothermal projects) and are placed in service after 2021 will be eligible for the full investment tax credit of 30%. Section 13102 of the IRA also expands the range of property that qualifies for the credit to include energy storage, microgrid controllers, biomass, dynamic glass, and linear generators.
The IRA also provides that the amount of the investment tax credit may be increased by 10 or 30 percent if certain wage and apprenticeship requirements are met.
The Treasury Department is required to issue “regulations or other guidance” to implement the expanded investment tax credit program.
For facilities beginning construction after 2024, the new section 48E clean electricity investment tax credit created by IRA section 13702 provides a continued investment tax credit.
Eligible Entities:
Current Status:
Section 70513 of the One Big Beautiful Act of 2025 (Public Law 119-21) phases out availability of the investment tax credit under IRA section 13102 for solar and wind energy by December 31, 2027. Section 70513 also applies “prohibited foreign entity” restrictions to those applying for the credits, denies credit for taxpayers renting or leasing facilities to “third part[ies],” eliminates the energy credit and increases domestic content rules for qualified energy facilities.
Trump Administration Actions:
- Congress Passes Budget Bill, Rescinding Funds and Repealing IRA Programs and Tax Credits [07/03/2025]
- Senate Parliamentarian Advises Several Provisions in Republicans’ “One Big, Beautiful Bill” Are Not Permissible, Subject to Byrd Rule [06/19/2025]
- Senate Finance Committee Releases Budget Reconciliation Draft Text [06/16/2025]
- OMB Orders Temporary Pause on Financial Assistance Programs, Later Rescinded [01/27/2025]
- OMB Clarifies Scope of the Order to Halt IRA Spending [01/21/2025]
- Trump Issues Executive Order to Halt All IRA Funding Disbursements [01/20/2025]
Implementation Status at End of Biden Administration:
IRS issued final rules for the section 48 Renewable Energy Investment Tax Credits, providing eligibility for the credits based on source type as well as heat and energy efficiency.
Biden Administration Actions:
- Treasury Releases Guidance on Domestic Content Bonus for Clean Energy Credits [01/16/2025]
- Treasury Releases Final Rules for Clean Energy Investment Tax Credit [12/04/2024]
- 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 to Provide Offshore Wind and Battery Storage Developers Investment Certainty [11/22/2023]
- Treasury Issues Proposed Rule on Clean Energy Apprenticeship and Prevailing Wage Requirements [08/30/2023]
- 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 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 Hoffman v. Department of Treasury (filed January 15, 2025), three individuals sued the U.S. Department of Treasury and local government parties for implementing the IRA’s renewable energy tax credits in violation of the National Environmental Policy Act with respect to renewable projects in Kansas. On July 1, 2025, the court granted the defendants’ motion to dismiss for failure to state a claim and for lack of standing, and entered a judgment for the defendants. On August 6, Hoffman appealed the judgment in the Tenth Circuit Court of Appeals.
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:
Rhodium estimates that taxpayers will claim $28.6 billion in Production and Investment Tax Credits through June 2024. The Congressional Budget Office projects taxpayers to claim $14 billion on Renewable Energy Investment Tax Credits by 2031. Congress’s Joint Committee on Taxation projects $140.1 billion in spending on all section 48 credits from 2024-2028.