Title 26, Internal Revenue CodeRelease 119-110
§48C Qualifying Advanced Energy Project Credit
Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter A — Determination of Tax Liability › PART IV — CREDITS AGAINST TAX › Subpart E — Rules for Computing Investment Credit › § 48C
Summary
Gives a tax credit equal to 30% of the qualified investment a taxpayer puts into a certified advanced energy project in a tax year. "Qualified investment" means the cost basis of eligible equipment the taxpayer puts in service that is part of the certified project, and the Secretary can set a maximum amount for each project. A "qualifying advanced energy project" is one the Secretary certifies that re-equips, expands, or builds an industrial or manufacturing facility to make or recycle things like solar, wind, geothermal, or other renewable energy equipment; fuel cells, microturbines, energy storage, or grid modernization gear; carbon capture or low‑carbon fuels and chemicals; energy conservation technologies; electric and large hybrid vehicles and their parts and charging/refueling infrastructure; or other advanced energy items. It also covers projects that cut greenhouse gas emissions by at least 20% through certain systems, and projects that process, refine, or recycle critical materials. It does not include parts of projects that make products used to refine or blend regular transportation fuel (renewable fuels are allowed). "Eligible property" is necessary, tangible equipment (not buildings or major structural parts) used for the project and eligible for depreciation. The Secretary must set up a program with the Energy Department within 180 days to review applications and certify projects. Under the first program, up to $2,300,000,000 in credits can be allocated. Applications are open for 2 years after the program starts; once an application is accepted, the applicant has 1 year to show they meet the rules, and a certification must lead to the project being placed in service within 3 years or it expires. The Secretary will pick projects that are commercially viable and that score highest on job creation, emissions reductions, innovation, low cost, and quick completion. The Secretary will review allocations after 4 years and can reallocate unused or revoked credits. The Secretary must publicly name applicants and credit amounts when certifying. A second program must also be set up within 180 days with up to $10,000,000,000 in credits, of which no more than $6,000,000,000 may go to projects outside certain designated census tracts that had no prior awards under the first program. For that program, applicants have 2 years after acceptance to meet requirements, and certified projects must be placed in service within 2 years. The credit rate for these allocations is 6% instead of 30% unless the project meets certain prevailing wage and apprenticeship rules, in which case the higher rate applies. Prevailing wage and apprenticeship rules follow similar federal standards and carry penalties if not followed. Credits awarded under this rule cannot also be claimed under sections 48, 48A, 48B, 48E, 45Q, or 45V.
Full Legal Text
Title 26, §48C
Internal Revenue Code, Source: USLM XML via OLRC
(a)In general
For purposes of section 46, the qualifying advanced energy project credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year with respect to any qualifying advanced energy project of the taxpayer.
(b)Qualified investment
(1)In general
For purposes of subsection (a), the qualified investment for any taxable year is the basis of eligible property placed in service by the taxpayer during such taxable year which is part of a qualifying advanced energy project.
(2)Certain qualified progress expenditures rules made applicable
Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of this section.
(3)Limitation
The amount which is treated as the qualified investment for all taxable years with respect to any qualifying advanced energy project shall not exceed the amount designated by the Secretary as eligible for the credit under this section.
(c)Definitions
(1)Qualifying advanced energy project
(A)In general
The term “qualifying advanced energy project” means a project, any portion of the qualified investment of which is certified by the Secretary under subsection (e) as eligible for a credit under this section— (i)
(ii)which re-equips an industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20 percent through the installation of—
(I)low- or zero-carbon process heat systems,
(II)carbon capture, transport, utilization and storage systems,
(III)energy efficiency and reduction in waste from industrial processes, or
(IV)any other industrial technology designed to reduce greenhouse gas emissions, as determined by the Secretary, or
(iii)which re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials (as defined in section 7002(a) of the Energy Act of 2020 (30 U.S.C. 1606(a)) .
(B)Exception
Such term shall not include any portion of a project for the production of any property which is used in the refining or blending of any transportation fuel (other than renewable fuels).
(2)Eligible property
The term “eligible property” means any property—
(A)which is necessary for—
(i)the production or recycling of property described in clause (i) of paragraph (1)(A),
(ii)re-equipping an industrial or manufacturing facility described in clause (ii) of such paragraph, or
(iii)re-equipping, expanding, or establishing an industrial facility described in clause (iii) of such paragraph,
(B)which is—
(i)tangible personal property, or
(ii)other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility, and
(C)with respect to which depreciation (or amortization in lieu of depreciation) is allowable.
(d)Qualifying advanced energy project program
(1)Establishment
(A)In general
Not later than 180 days after the date of enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying advanced energy project program to consider and award certifications for qualified investments eligible for credits under this section to qualifying advanced energy project sponsors.
(B)Limitation
The total amount of credits that may be allocated under the program shall not exceed $2,300,000,000.
(2)Certification
(A)Application period
Each applicant for certification under this paragraph shall submit an application containing such information as the Secretary may require during the 2-year period beginning on the date the Secretary establishes the program under paragraph (1).
(B)Time to meet criteria for certification
Each applicant for certification shall have 1 year from the date of acceptance by the Secretary of the application during which to provide to the Secretary evidence that the requirements of the certification have been met.
(C)Period of issuance
An applicant which receives a certification shall have 3 years from the date of issuance of the certification in order to place the project in service and if such project is not placed in service by that time period, then the certification shall no longer be valid.
(3)Selection criteria
In determining which qualifying advanced energy projects to certify under this section, the Secretary—
(A)shall take into consideration only those projects where there is a reasonable expectation of commercial viability, and
(B)shall take into consideration which projects—
(i)will provide the greatest domestic job creation (both direct and indirect) during the credit period,
(ii)will provide the greatest net impact in avoiding or reducing air pollutants or anthropogenic emissions of greenhouse gases,
(iii)have the greatest potential for technological innovation and commercial deployment,
(iv)have the lowest levelized cost of generated or stored energy, or of measured reduction in energy consumption or greenhouse gas emission (based on costs of the full supply chain), and
(v)have the shortest project time from certification to completion.
(4)Review and redistribution
(A)Review
Not later than 4 years after the date of enactment of this section, the Secretary shall review the credits allocated under this section as of such date.
(B)Redistribution
The Secretary may reallocate credits awarded under this section if the Secretary determines that—
(i)there is an insufficient quantity of qualifying applications for certification pending at the time of the review, or
(ii)any certification made pursuant to paragraph (2) has been revoked pursuant to paragraph (2)(B) because the project subject to the certification has been delayed as a result of third party opposition or litigation to the proposed project.
(C)Reallocation
If the Secretary determines that credits under this section are available for reallocation pursuant to the requirements set forth in paragraph (2), the Secretary is authorized to conduct an additional program for applications for certification.
(5)Disclosure of allocations
The Secretary shall, upon making a certification under this subsection, publicly disclose the identity of the applicant and the amount of the credit with respect to such applicant.
(e)Additional allocations
(1)In general
Not later than 180 days after the date of enactment of this subsection, the Secretary shall establish a program to consider and award certifications for qualified investments eligible for credits under this section to qualifying advanced energy project sponsors.
(2)Limitation
The total amount of credits which may be allocated under the program established under paragraph (1) shall not exceed $10,000,000,000, of which not greater than $6,000,000,000 may be allocated to qualified investments which are not located within a census tract which—
(A)is described in clause (iii) of section 45(b)(11)(B), and
(B)prior to the date of enactment of this subsection, had no project which received a certification and allocation of credits under subsection (d).
(3)Certifications
(A)Application requirement
Each applicant for certification under this subsection shall submit an application at such time and containing such information as the Secretary may require.
(B)Time to meet criteria for certification
Each applicant for certification shall have 2 years from the date of acceptance by the Secretary of the application during which to provide to the Secretary evidence that the requirements of the certification have been met.
(C)Period of issuance
An applicant which receives a certification shall have 2 years from the date of issuance of the certification in order to place the project in service and to notify the Secretary that such project has been so placed in service, and if such project is not placed in service by that time period, then the certification shall no longer be valid. If any certification is revoked under this subparagraph, the amount of the limitation under paragraph (2) shall not be increased by the amount of the credit with respect to such revoked certification.
(D)Location of project
In the case of an applicant which receives a certification, if the Secretary determines that the project has been placed in service at a location which is materially different than the location specified in the application for such project, the certification shall no longer be valid.
(4)Credit rate conditioned upon wage and apprenticeship requirements
(A)Base rate
For purposes of allocations under this subsection, the amount of the credit determined under subsection (a) shall be determined by substituting “6 percent” for “30 percent”.
(B)Alternative rate
In the case of any project which satisfies the requirements of paragraphs (5)(A) and (6), subparagraph (A) shall not apply.
(5)Prevailing wage requirements
(A)In general
The requirements described in this subparagraph with respect to a project are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the re-equipping, expansion, or establishment of a manufacturing facility shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such project is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.
(B)Correction and penalty related to failure to satisfy wage requirements
Rules similar to the rules of section 45(b)(7)(B) shall apply.
(6)Apprenticeship requirements
Rules similar to the rules of section 45(b)(8) shall apply.
(7)Disclosure of allocations
The Secretary shall, upon making a certification under this subsection, publicly disclose the identity of the applicant and the amount of the credit with respect to such applicant.
(f)Denial of double benefit
A credit shall not be allowed under this section for any qualified investment for which a credit is allowed under section 48, 48A, 48B, 48E, 45Q, or 45V.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
Subsections (c)(4) and (d) of section 46 (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990), referred to in subsec. (b)(2), means section 46(c)(4) and (d) as in effect before enactment of Pub. L. 101–508, which amended section 46 generally. The date of enactment of this section, referred to in subsec. (d)(1)(A), (4)(A), is the date of enactment of Pub. L. 111–5, which was approved Feb. 17, 2009. The date of enactment of this subsection, referred to in subsec. (e)(1), (2)(B), is the date of enactment of Pub. L. 117–169, which was approved Aug. 16, 2022.
Amendments
2025—Subsec. (e)(3)(C). Pub. L. 119–21 substituted “shall not be increased” for “shall be increased”. 2022—Subsec. (c)(1)(A). Pub. L. 117–169, § 13501(b)(1), inserted “, any portion of the qualified investment of which is certified by the Secretary under subsection (e) as eligible for a credit under this section” after “means a project” in introductory provisions. Subsec. (c)(1)(A)(i). Pub. L. 117–169, § 13501(b)(2)(A), substituted “an industrial or manufacturing facility for the production or recycling of” for “a manufacturing facility for the production of” in introductory provisions. Subsec. (c)(1)(A)(i)(I). Pub. L. 117–169, § 13501(b)(2)(B), inserted “water,” after “sun,”. Subsec. (c)(1)(A)(i)(II). Pub. L. 117–169, § 13501(b)(2)(C), substituted “energy storage systems and components” for “an energy storage system for use with electric or hybrid-electric motor vehicles”. Subsec. (c)(1)(A)(i)(III). Pub. L. 117–169, § 13501(b)(2)(D), substituted “grid modernization equipment or components” for “grids to support the transmission of intermittent sources of renewable energy, including storage of such energy”. Subsec. (c)(1)(A)(i)(IV). Pub. L. 117–169, § 13501(b)(2)(E), substituted “, remove, use, or sequester carbon oxide emissions” for “and sequester carbon dioxide emissions”. Subsec. (c)(1)(A)(i)(V). Pub. L. 117–169, § 13501(b)(2)(F), added subcl. (V) and struck out former subcl. (V) which read as follows: “property designed to refine or blend renewable fuels or to produce energy conservation technologies (including energy-conserving lighting technologies and smart grid technologies),”. Subsec. (c)(1)(A)(i)(VI) to (IX). Pub. L. 117–169, § 13501(b)(2)(G)–(J), added subcls. (VI) to (VIII), redesignated former subcl. (VII) as (IX), struck out “and” at end of subcl. (IX), and struck out former subcl. (VI) which read as follows: “new qualified plug-in electric drive motor vehicles (as defined by section 30D) or components which are designed specifically for use with such vehicles, including electric motors, generators, and power control units, or”. Subsec. (c)(1)(A)(ii), (iii). Pub. L. 117–169, § 13501(b)(3), added cls. (ii) and (iii) and struck out former cl. (ii) which read as follows: “any portion of the qualified investment of which is certified by the Secretary under subsection (d) as eligible for a credit under this section.” Subsec. (c)(2)(A). Pub. L. 117–169, § 13501(c), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “which is necessary for the production of property described in paragraph (1)(A)(i),”. Subsec. (e). Pub. L. 117–169, § 13501(a), added subsec. (e). Former subsec. (e) redesignated (f). Subsec. (f). Pub. L. 117–169, § 13501(a), (d), redesignated subsec. (e) as (f) and substituted “48B, 48E, 45Q, or 45V” for “or 48B”. 2014—Subsec. (b)(3). Pub. L. 113–295, § 209(g), inserted “as the qualified investment” after “The amount which is treated”. Subsec. (c)(1)(A)(i)(VI). Pub. L. 113–295, § 221(a)(2)(C), struck out “, qualified plug-in electric vehicles (as defined by section 30(d)),” before “or components”.
Statutory Notes and Related Subsidiaries
Effective Date
of 2025 Amendment Pub. L. 119–21, title VII, § 70515(b),
July 4, 2025, 139 Stat. 276, provided that: “The amendment made by this section [amending this section] shall take effect on the date of enactment of this Act [
July 4, 2025].”
Effective Date
of 2022 Amendment Pub. L. 117–169, title I, § 13501(e), Aug. 16, 2022, 136 Stat. 1971, provided that: “The
Amendments
made by this section [amending this section] shall take effect on January 1, 2023.”
Effective Date
of 2014 AmendmentAmendment by section 209(g) of Pub. L. 113–295 effective as if included in the provisions of the American Recovery and Reinvestment Tax Act of 2009, Pub. L. 111–5, div. B, title I, to which such amendment relates, see section 209(k) of Pub. L. 113–295, set out as a note under section 24 of this title. Amendment by section 221(a)(2)(C) of Pub. L. 113–295 effective Dec. 19, 2014, subject to a
Savings Provision
, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.
Effective Date
Section applicable to periods after Feb. 17, 2009, under rules similar to the rules of section 48(m) of this title as in effect on the day before Nov. 5, 1990, see section 1302(d) of Pub. L. 111–5, set out as an
Effective Date
of 2009 Amendment note under section 46 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 48C
Title 26, Internal Revenue Code
Last Updated
Sep 23, 2026
Release point: 119-110