30%
CREDIT RATE
6%
WITHOUT PW
$10B
IRA ALLOCATION
$4B Reserved
ENERGY COMM.
How It Works
THREE STEPS TO CLAIM §48C
01
Submit Concept Paper to DOE
A 10-page concept paper describing the facility, technology, investment amount, and expected jobs. DOE provides encouraged/discouraged feedback before you invest in a full application.
02
Receive IRS Certification
After DOE scores your full application on technical merit, job creation, and community impact, the IRS issues a certification letter allocating a specific credit amount.
03
Claim Credit on Form 3468
Place the certified property in service and file Form 3468 (Investment Credit) for that tax year. Projects must begin construction within 2 years of certification.
Competitive Allocation Required
Unlike ITC/PTC, you cannot simply claim 48C on your tax return. You must apply, receive DOE/IRS certification, and then claim the credit. Start the application process well before construction begins.
Eligible Categories
QUALIFYING MANUFACTURING CATEGORIES
| Category | Qualifying Examples |
|---|---|
| Solar Energy | PV panels, solar glass, inverters, racking, trackers |
| Wind Energy | Turbine blades, towers, nacelles, gearboxes, generators |
| Battery Storage | Lithium-ion cells, packs, management systems, electrolytes |
| Electric Vehicles | EV motors, charging equipment, battery packs, power electronics |
| Energy Efficiency | Heat pumps, HVAC equipment, insulation, LED systems |
| Grid Modernization | Transformers, advanced metering, grid control equipment |
| Carbon Capture | CCS components, direct air capture equipment, CO2 storage |
| Advanced Nuclear | Small modular reactor components, fuel systems |
Application Process
FIVE-STEP APPLICATION PROCESS
01
Submit Concept Paper to DOE
A 10-page concept paper describing the facility, technology, investment amount, and expected jobs. DOE provides encouraged/discouraged feedback.
02
Full Application to IRS/DOE
Detailed technical and financial application. DOE scores on merit criteria; IRS evaluates tax compliance. The joint review determines allocation.
03
Receive Certification
Approved applicants receive an IRS certification letter allocating a specific credit amount. Projects must begin construction within 2 years of certification.
04
Place Property in Service
Complete construction and place the qualified property in service. Document all qualifying investment costs and prevailing wage compliance.
05
Claim Credit on Form 3468
File Form 3468 (Investment Credit) with your federal return for the tax year the property is placed in service. The credit is non-refundable but carryover is permitted.
Example Calculation
BATTERY MANUFACTURING FACILITY
// Lithium-ion battery pack manufacturing
Qualifying investment: $50,000,000
Prevailing wage compliant: Yes
Energy community location: Yes (scoring boost)
Credit rate: 30%
Total credit: $50M × 30% = $15,000,000
* Non-refundable. Carryover permitted. Must receive IRS certification first.
CFO Checklist
BEFORE YOU APPLY FOR §48C
1. Confirm your manufacturing category qualifies — not all clean energy manufacturing is listed; review IRS Notice 2023-29 for the eligible property list.
2. Check energy community status for your facility location — the $4B reserve for energy communities receives scoring preference and has higher award rates.
3. Document prevailing wage and apprenticeship compliance plans before submitting — the application asks for specifics, and non-compliance drops the rate from 30% to 6%.
4. Prepare the concept paper before engaging full engineering teams — DOE feedback on the concept paper prevents wasted application effort.
5. Do not begin construction before receiving IRS certification — pre-certification construction may disqualify the facility from the credit.
FAQ
FREQUENTLY ASKED QUESTIONS
What is the Section 48C credit rate?
The credit rate is 30% of qualifying investment costs for facilities that comply with prevailing wage and apprenticeship requirements. Without prevailing wage compliance, the rate drops to 6%. The 30% rate applies to the qualified investment in eligible manufacturing property.
How does the 48C application process work?
Section 48C uses a competitive allocation process. Applicants submit a concept paper to the Department of Energy (DOE) for technical review, then a full application to the IRS. DOE scores applications on technical merit, job creation, and community impact. The IRS issues a certification for approved projects. Only certified projects can claim the credit.
What types of manufacturing qualify for 48C?
Qualifying manufacturing includes: solar components and panels, wind turbines and components, battery storage systems and components, electric vehicle equipment, energy efficiency equipment, grid modernization equipment, carbon capture components, and advanced nuclear components.
How much 48C funding remains available?
The IRA appropriated $10 billion for 48C, with at least $4 billion reserved for projects in energy communities. Allocation is done in rounds — check IncentEdge for current round status and remaining allocation.
Can 48C stack with ITC or PTC?
Section 48C cannot be claimed on the same property as the ITC or PTC. However, a manufacturer can use 48C for their factory investment and separately use ITC for a solar or storage system installed at the same facility — as long as the credited property is distinct.