Federal tax credits for commercial solar, storage and efficiency in 2026.
Section 48E is the main federal credit for qualifying solar and storage. Solar and storage now run on different deadlines, two other credits have ended for new projects, and a court ruling changed the beginning-of-construction rules. This page reflects our reading of the cited sources, not tax advice.
The rule in one paragraph
Section 48E, the clean electricity investment credit, applies to qualifying facilities and energy storage placed in service after December 31, 2024. The IRS describes a base rate of 6% and an increased rate of up to 30% for projects that meet prevailing wage and registered apprenticeship requirements, plus bonus amounts of up to 10 percentage points each for domestic content and for siting in an energy community.
Under the 2025 budget law (Public Law 119-21), qualifying solar that begins construction after July 4, 2026 generally must be placed in service by December 31, 2027. Storage follows a separate schedule. On June 6, 2026 the U.S. District Court for the District of Columbia vacated IRS Notice 2025-42, which had narrowed how construction is shown to begin; earlier guidance (Notices 2018-59 and 2022-61) applies again unless the ruling changes.
Two credits have ended for new projects: the EV charging credit (Section 30C) does not apply to property placed in service after June 30, 2026, and the Section 179D deduction is not allowed for property whose construction begins after June 30, 2026.
Primary source: IRS, Clean Electricity Investment Credit (page dated January 5, 2026); IRS, Elective pay and transferability; IRS, Instructions for Form 8911 (30C), December 2025; IRS, FAQs on 25C, 25D, 25E, 30C, 30D, 45L, 45W and 179D under Public Law 119-21; Perkins Coie, district court vacates Notice 2025-42 (June 9, 2026).
Who it applies to
Taxable owners claim the credit against their own federal tax. Owners without enough tax liability can transfer (sell) eligible credits to an unrelated buyer for cash under Section 6418.
Tax-exempt and public owners may use elective pay under Section 6417 where they own the qualifying asset; the IRS requires pre-filing registration before the return is filed. Under a third-party structure such as a PPA, the system owner claims the credit.
What it costs / what it pays
Credit value depends on the project's construction dates, its labor and sourcing compliance, the bonuses it actually qualifies for and who owns it. Rules on components and financing tied to prohibited foreign entities also apply from 2026 and belong in procurement, not just the tax file.
We model a project at the rate it will actually qualify for, not the best case, and keep the evidence (wage records, domestic content documentation, energy community maps) from the start of construction.
How NOI's structure fits
For solar, the dated construction start is now part of the project plan. For solar plus storage we plan two timelines, not one.
Every figure on this page should be confirmed with your tax adviser before it is relied on; NOI does not provide tax advice.
Timeline
- QualificationOwnership structure and tax position: own, transfer, elective pay or third-party.
- Design reviewConstruction start plan, wage and apprenticeship compliance, sourcing documentation.
- ApplicationsElective pay pre-filing registration where it applies; bonus documentation assembled.
- After approvalsPlaced-in-service evidence and the credit claim, prepared with the owner's tax adviser.
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Other programs in this section
Annual emissions limits on most NYC buildings over 25,000 sq ft, tightening in 2030.
ComplianceBoston's building emissions standard, with annual reporting and emissions limits phased in by building size.
ComplianceWashington DC's Building Energy Performance Standards, enforced on cycles with compliance pathways.
IncentiveNYSERDA's declining-block incentives for commercial and industrial solar across New York.
IncentiveNew Jersey's Successor Solar Incentive, community solar program, and what changed after TRECs.
IncentiveSMART 3.0 capacity and compensation schedules, adders, and how they are assessed alongside BERDO.
IncentiveConnecticut's non-residential renewable energy solutions tariff plus Energy Storage Solutions incentives.
IncentiveAlternative Energy Credits, PPL and PECO rebate programs, and the Act 129 efficiency framework.
IncentiveUtility pay-for-performance for commercial batteries that discharge during summer peak events.
IncentiveCommercial-scale solar grants per watt, with carport and storage adders, awarded in rounds.
IncentiveLong-term financing for energy upgrades, repaid through a property assessment.
IncentiveCalifornia's storage incentive: non-residential budget categories are currently closed.
IncentiveRebates for public DC fast chargers in California, in two 2026-27 windows.
This page reflects our understanding as of October 7, 2026. Regulatory numbers and program rules move. Confirm current statute specifics with your tax and legal advisors before signature.