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Public Information Index · Updated July 2026

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Federal Investment Tax Credit · §48E

30% federal Investment Tax Credit on commercial-scale clean-energy installations under the Inflation Reduction Act of 2022, with a 10% Energy Community bonus.

Credit Quick Facts
StatuteInternal Revenue Code §48E (Inflation Reduction Act of 2022, Public Law 117-169)
Base credit30% Investment Tax Credit on qualifying clean-energy property
Energy Community bonusAdditional 10% credit for property located in DOE-designated Energy Communities
Domestic content bonusAdditional 10% credit for projects meeting domestic content requirements
SunsetApplies to property placed in service after 2024; phase-down begins for technology-neutral credit after 2032

What §48E does

Internal Revenue Code §48E, enacted as part of the Inflation Reduction Act of 2022, provides a federal Investment Tax Credit (ITC) for qualifying clean-energy property placed in service after December 31, 2024. §48E replaced the legacy §48 ITC for facilities placed in service in 2025 and later, and is technology-neutral — it applies to any electricity-generation facility with zero or near-zero greenhouse gas emissions, including solar, wind, geothermal, and storage.

Energy Community Bonus

Properties located in DOE-designated Energy Communities qualify for an additional 10% ITC, bringing the credit to 40% before any other bonus stacking. The DOE defines Energy Communities as census tracts that meet specific criteria around fossil fuel employment, unemployment, or recent coal-related closures. Many Contra Costa County, Kern County, and San Joaquin County census tracts qualify under the FFE + unemployment route.

Residential application: §25D vs §48E

§48E applies to commercial-scale clean-energy property. Homeowners installing solar with their own funds historically claimed the residential parallel under Internal Revenue Code §25D. The §25D residential credit phased down at the end of 2025 for unsubsidized residential purchases.

However, in third-party-owned (TPO)arrangements — including Power Purchase Agreements (PPAs) and operating leases — the system is owned by the financing entity, not the homeowner. That entity claims the §48E credit, and the value of the credit can be passed through to the homeowner in the form of a reduced monthly rate. The 10% Energy Community bonus, where applicable, is also captured through this mechanism.

Verify your home’s Energy Community status. The DOE publishes an interactive map that lets you enter an address to check whether the property is within a designated Energy Community census tract. Status may change as the DOE updates its datasets.

How to verify Energy Community status

  1. Go to the official DOE Energy Communities map and tax credit bonus page
  2. Use the address-search tool to enter the home address.
  3. The map will indicate whether the address falls within a qualifying tract and, if so, which qualification basis applies (FFE, unemployment, brownfield, or coal closure).

Where to verify

Source: Internal Revenue Code §§25D and 48E; Inflation Reduction Act of 2022, Public Law 117-169. Energy Community designations published by the U.S. Department of Energy. Tax treatment of any specific transaction depends on individual circumstances; consult a licensed tax professional for advice specific to your return.