Solar Tax Manual

The SEIA Federal Tax Guide for Solar Energy is a regularly updated resource created to guide you and your customers through the federal tax benefits for solar. This detailed guide is a SEIA members-only benefit. Learn more about becoming a SEIA member.

Download the guide on the SEIA Sphere

Version 10.0 is a comprehensive rewrite of the guide to describe changes to the Code made by the Inflation Reduction Act of 2022, P.L. 117-169 (Aug. 16, 2022) (the “IRA”).. Since the enactment of the IRA, the IRS has issued dozens of guidance pieces, including proposed and final regulations regarding a variety of Code sections added or amended under the IRA. Of particular importance to solar developers, the IRA restored the base investment tax credit rate for solar projects to 30 percent, subject to certain conditions discussed below. Prior to the IRA, the investment tax credit rate had begun to phase down from 30 percent in 2020. The IRA also adds a standalone 30 percent tax credit for energy storage, enables transfer of certain credits, provides direct payment to certain entities and creates tax credits for the manufacture of certain solar energy and energy storage components.

The IRA also includes various “adders” to the base credit rate, in some cases resulting in significantly higher investment tax credit rates than 30 percent. In general, these bonus rates apply to projects that (i) incorporate threshold percentages of domestic content, (ii) are in certain locations historically impacted by fossil energy production, or (iii) benefit low-income communities. Additionally, the IRA allows solar developers to claim production tax credits for photovoltaic electricity production in lieu of the investment tax credit. This last change has significant implications for utility-scale projects, where production tax credits may be nearly twice as valuable as investment tax credits in some locations. 

Edition 10.0 was released in March 2024.

NOTE:

This document is only to be used by SEIA member companies in agreements to which they are a party. Dissemination to clients, partners or other third parties for use in arrangements to which the SEIA member is not a party is forbidden. The documents and descriptions linked to or provided on this page are provided for informational purposes only and do not constitute legal advice. Consult with legal, tax and accounting professionals before using the information and documents provided on this page. The documents should not be construed as legal advice for any particular facts or circumstances.

These documents and descriptions were prepared as the result of work sponsored by SEIA. They do not necessarily represent the views of SEIA or its employees or members. SEIA, its employees, contractors and subcontractors make no warranty, express or implied, and assume no legal liability, for the documents and descriptions.