Section 48C Advanced Energy Manufacturing Credit
Section 48C provides a 30% tax credit for investments in advanced clean energy manufacturing facilities. The Inflation Reduction Act allocated $10 billion in new 48C credits, with at least $4 billion reserved for projects in designated energy communities.
What is Section 48C?
Section 48C was originally enacted in 2009 under the American Recovery and Reinvestment Act to support domestic clean energy manufacturing. The IRA revived and greatly expanded the program in 2022, allocating $10 billion in new credits available through a competitive application process administered jointly by the IRS and Department of Energy.
Unlike the ITC or PTC which are available to any qualifying project, 48C credits must be applied for and allocated by the IRS. Applications are evaluated by DOE on technical merit, greenhouse gas emission reduction, supply chain development, and community benefits.
Energy Community Priority: At least $4 billion of the $10 billion allocation is reserved for projects in designated energy communities — areas with significant employment in fossil fuel industries or that have experienced a coal power plant or mine closure. Energy community projects receive scoring preference.
Eligible 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
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.
Submit Concept Paper to DOE
A 10-page concept paper describing the facility, technology, investment amount, and expected jobs. DOE provides encouraged/discouraged feedback.
Full Application to IRS/DOE
Detailed technical and financial application. DOE scores on merit criteria; IRS evaluates tax compliance. The joint review determines allocation.
Receive Certification
Approved applicants receive an IRS certification letter allocating a specific credit amount. Projects must begin construction within 2 years of certification.
Place Property in Service
Complete construction and place the qualified property in service. Document all qualifying investment costs and prevailing wage compliance.
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.
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.
Check Your 48C Manufacturing Eligibility
IncentEdge identifies qualifying manufacturing categories, checks energy community status, and prepares your concept paper framework — so you can move fast on the next allocation round.
Get Started Free