12 clean energy tax incentives for SMBs to claim in 2026

As of July 2026, eligibility for three federal clean energy tax incentives established or extended by the Inflation Reduction Act has been terminated by the One Big Beautiful Bill Act (OBBBA). For tax year 2026, businesses can claim these sunsetted incentives for eligible projects or purchases made before July 1, a credit for commercial clean vehicles bought before October 2025, and the eight remaining clean energy tax incentives spanning energy production, fuels, and manufacturing.

Clean energy incentives generally support the production and use of wind, solar, nuclear, hydropower, geothermal, and biomass energy. Every business owner that produces clean energy, builds clean energy facilities, or uses clean energy transportation should check their eligibility for the tax incentives below.

What you need to know

• Some federal clean energy incentives remain available in 2026, while others were accelerated, phased out, or terminated by the OBBBA.
• For most small businesses, the best remaining clean energy tax opportunities are in energy production, fuels, and manufacturing.
• You can increase your clean energy credit amount up to five times if your business meets prevailing wage and apprenticeship (PWA) requirements as set by the IRA.
• Sections 45Q, 45V, 45X, 45Y, 45Z, and 48E remain broadly available through tax years 2026 and 2027. Section 40A(b)(4) is available through 2026.
• You can claim Section 45U on qualifying nuclear facilities placed in service before August 16, 2022.
• You can claim Section 45W on qualifying vehicles acquired before October 1, 2025, if you did not claim them in tax year 2025.
• You can claim Sections 30C, 45L, and 179D if your purchase or project qualified before July 1, 2026.

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At a glance: What clean-energy tax credits are available to small businesses in 2026?

The table below lists all clean energy tax incentives that are available to business owners for tax year 2026, what they cover, and whether they remain broadly or partially available.

In a recent article, Elevated Tax Strategies co-founder and managing partner Ramon Liriano Jr. encourages business owners to be realistic: “There are eight clean energy credits still broadly available in 2026, but let’s be honest about who they are for. Most of them pay you to produce electricity, fuel, hydrogen, or manufactured components. If you run a dental practice or a landscaping company, that list is not your list.”

Are Inflation Reduction Act business tax credits still available in 2026?

The Inflation Reduction Act (IRA) of 2022 introduced and extended many clean energy tax incentives, while the 2025 One Big Beautiful Bill Act (OBBBA) limited or eliminated them to varying degrees. The result is that, for tax year 2026, some of the IRA’s clean energy tax incentives are no longer available, some remain available for projects and purchases made before recent deadlines, and some remain available under stricter conditions or accelerated phase-out schedules.

Browse the tax credits below to learn more about your eligibility for IRA clean energy credits.

TAX CREDIT TRANSFERS

Under the Inflation Reduction Act, some clean energy tax credits are transferable, meaning you can sell these credits to third-party buyers for cash. It works like this: First, you must register for a tax credit transfer with the IRS. Then, you negotiate a discounted cash price with your buyer—the payment you receive is tax-exempt, and your buyer can use the purchased credit to reduce their tax liability. Last, you report the sale (including your transfer registration number) on Form 3800.

Of the tax credits listed in this article, the following are transferable: 30C, 40A(b)(4), 45Q, 45U, 45V, 45X, 45Y, 45Z, 48E

On transfers, Liriano writes: “Transferability is the right move when you do not have the tax liability to absorb the credit, and the wrong move when you do. You are selling a dollar for less than a dollar, plus legal and insurance costs on your side. If your business will owe real tax over the next few years, use the credit. If you have losses, credits stacking up unused, or a passive activity problem, then selling it for cash today beats holding a credit you might never absorb.”

List of clean energy tax incentives for small business owners in 2026

Clean energy tax incentives come in two forms:

• Tax credits reduce the amount of your income tax bill. A $10,000 credit reduces the amount of income tax you owe by $10,000.
• Tax deductions reduce the amount of your taxable income. If your income tax rate is 20%, a $10,000 deduction reduces the amount of income tax you owe by $2,000.

TAX CREDIT CARRYOVER

If your credit amount exceeds your business’s tax liability, certain credits can be partially applied to previous and future tax years, an action called carryover.

The list below includes clean energy credits and deductions available to small business owners in tax year 2026. If you think you might qualify for an incentive, follow the link to that incentive’s IRS page and speak to a qualified tax professional for more information.

Energy

Clean Electricity Investment Credit (Section 48E)

• What it is: A technology-neutral tax credit for capital investment in facilities that generate or store clean electricity.
• Can you claim it?: You can claim a 48E credit if you invested capital in a qualified facility that generates electricity with zero greenhouse gas emissions, or in energy storage technology, placed in service after 2024.
• Credit amount: 6% of your investment, or up to 30% if your facility produces or stores under 1 megawatt AC; or began construction before January 29, 2023; or your business meet PWA requirements (see the information box below). Several bonus credits are also available (see below).
• Transferable: Yes
• IRS form: Form 3468, Investment Credit
• Link to IRS webpage

Under OBBBA, eligibility for wind and solar projects terminates for facilities placed in service after Dec 31, 2027, unless construction began by July 4, 2026. (Other technologies will phase out later.) The OBBBA also added new Foreign Entity of Concern (FEOC) restrictions to Section 48E credits—your business may be ineligible if your project or eligible components receive too much material assistance from a prohibited foreign entity.

According to Liriano, “The beginning-of-construction rule for solar has been litigated, vacated, and is probably going to be appealed. I am not going to tell a client to bet a six-figure project on how that appeal lands. Document both ways. Show real physical work of a significant nature, keep dated photos and signed work orders, and separately track that you incurred at least five percent of total project cost. Doing both costs you a folder. Doing neither costs you the credit.”

You can’t claim both the 48E investment credit and the 45Y production credit for the same facility.

Available bonus credits

If eligible, you can earn the following bonus credits in addition to your base or PWA-increased 48E credit amount:

• Domestic content bonus credit (+10 percentage points): For qualifying facilities built using a certain percentage of steel, iron, or manufactured products produced in the United States. The OBBBA established these qualifying thresholds based on when construction of the facility began:
  • Before June 16, 2025: 40% (20% for offshore wind)
  • June 16–December 31, 2025: 45% (27.5% for offshore wind)
  • January 1–December 31, 2026: 50% (35% for offshore wind)
  • January 1, 2027, and after: 55% for all facilities
• Energy community bonus credit (+10 percentage points): For qualifying facilities built in an area designated as either polluted and underused industrial land or a historically fossil fuel–dependent economic area. Click here to see the official list of energy communities.
• Low-income communities bonus credit program (+10 or +20 percentage points): For qualifying productive facilities (under 5 megawatts AC) built in a low-income community, on Indian land, or as part of a qualified low-income residential building or economic benefit project. This is an allocated tax program that requires a separate application—the application window for this tax year closed August 7, 2026.

PWA REQUIREMENTS

Per the Inflation Reduction Act, you can multiply the base amount of some clean energy tax credits up to five times by proving that your business meets prevailing wage and apprenticeship (PWA) requirements:

• You pay employees at least the standard wage and benefits for their trade in your area, as determined by the Department of Labor
• You hire apprentices from registered trade programs for a certain number of hours

Talk to a tax professional if you think you may be able to claim the increased amounts, as the IRS requires specific documentation.

• Of the tax incentives listed in this article, the following are eligible for increases by meeting prevailing wage and apprenticeship requirements: 30C, 45Q, 45V, 45Y, 45Z, 48E, 179D
• The following are eligible for increases by meeting only the prevailing wage requirement: 45L, 45U
• The following are not eligible for prevailing wage or apprenticeship increases: 40A(b)(4), 45W, 45X

“When PWA does apply, it is not a tax election you make in April,” says Ramon Liriano Jr. of Elevated Tax Strategies. “It is a contract you write before the first shovel moves. It means your contractor pays Department of Labor wage rates, uses registered apprentices for a set share of the hours, and hands you certified payroll to prove it. If that language is not in the contract, you are getting the base amount, not the five-times amount, and no accountant can fix that after the fact.”

Clean Electricity Production Credit (Section 45Y)

• What it is: A technology-neutral production tax credit for clean electricity.
• Can you claim it?: You can claim a 45Y credit if you own and operate a qualifying facility placed in service after 2024, and sold the electricity it produced to an unrelated person during this tax year, or, where the facility has a metering device owned and operated by an unrelated person, sold, consumed, or stored it.
• Credit amount: The 45Y credit is inflation-adjusted, and its value for tax year 2026 has not yet been announced. For tax year 2025, the amount was: 0.6¢ per kilowatt hour of electricity produced and sold, or 3¢ per kilowatt hour if the facility has a maximum net output of less than 1 megawatt (measured in alternating current), began construction before the wage-and-apprenticeship guidance date, or your business meets PWA requirements. Several bonus credits are also available (see below).
• Transferable: Yes
• IRS form: Form 7211, Clean Electricity Production Credit
• Link to IRS webpage

Under Section 45Y, a qualifying facility is one that was originally placed in service less than 10 years ago. After 10 years of service, your facility is no longer eligible for 45Y.

Under OBBBA, electricity from solar power is not eligible during a tax year in which you rented or leased the solar equipment. In addition, eligibility for wind and solar projects terminates for facilities placed in service after Dec 31, 2027, unless construction began by July 4, 2026. (Other technologies will phase out later.) The OBBBA also added new Foreign Entity of Concern (FEOC) restrictions to Section 45Y credits—your business may be ineligible if your project or eligible components receive too much material assistance from a prohibited foreign entity.

Available bonus credits

If eligible, you can earn the following bonus credits in addition to your base or PWA-increased 45Y credit amount:

• Domestic content bonus credit (+10 percent): For qualifying facilities built using a certain percentage of steel, iron, or manufactured products produced in the United States. The OBBBA established these qualifying thresholds based on when construction of the facility began:
  • Before January 1, 2025: 40% (20% for offshore wind)
  • In 2025: 45% (27.5% for offshore wind)
  • In 2026: 50% (35% for offshore wind)
  • In 2027: 55% (45% for offshore wind)
  • January 1, 2028, and after: 55% for all facilities
• Energy community bonus credit (+10 percent): For qualifying facilities built in an area designated as either polluted and underused industrial land or a historically fossil fuel–dependent economic area. Click here to see the official list of energy communities.

Almost every article about these credits tells small business owners they have to meet prevailing wage and apprenticeship rules to get 30% instead of 6%. For most of them, that is simply not true. Generation facilities under one megawatt are exempt and get the full amount automatically, and a rooftop solar system on a warehouse is usually a fraction of that. The rule bites when you cross one megawatt, and it bites on the 179D building deduction, which has no small-project exemption at all.”

– Ramon Liriano Jr., Elevated Tax Strategies

Zero-Emission Nuclear Power Production Credit (Section 45U)

• What it is: A production tax credit for electricity from nuclear power.
• Can you claim it?: You can claim a 45U credit if you own and operate a qualifying zero-emission nuclear power facility that generates and sells electricity and was placed in service before August 16, 2022.
• Credit amount: The 45U credit is inflation-adjusted, and only applies to facilities originally placed in service before August 16, 2022. For tax year 2026 the amount is 0.3¢ per kilowatt hour of electricity produced and sold, multiplied by five (to 1.5¢ per kilowatt hour) if your business meets the prevailing wage requirement. The credit is reduced as the facility’s gross receipts from electricity sold to unrelated persons rise above a per-kilowatt-hour threshold, which is 2.6¢ for 2026.
• Transferable: Yes
• IRS form: Form 7213, Nuclear Power Production Credit
• Link to IRS webpage

The 45U credit is available until 2033.

Carbon Oxide Sequestration Credit (Section 45Q)

• What it is: A tax credit for carbon capture.
• Can you claim it?: You can claim a 45Q credit if you own and operate certain equipment that captures carbon monoxide, carbon dioxide, or carbon suboxide at qualified industrial facilities within the United States that meet IRS and EPA requirements.
• Credit amount: Varies by facility type and carbon use: for equipment placed in service after July 4, 2025, $17 per metric ton whether the carbon oxide is stored in deep earth or used for oil and gas recovery, and $36 per metric ton for direct air capture. For equipment placed in service on or before July 4, 2025, the older rates still apply: $17 for deep earth storage, $12 for oil and gas recovery, $36 for direct air capture stored in deep earth, and $26 for direct air capture used for oil and gas recovery. Amounts are increased up to five times if your business meets PWA requirements.
• Transferable: Yes
• IRS form: Form 8933, Carbon Oxide Sequestration Credit
• Link to IRS webpage

The OBBBA added new Foreign Entity of Concern (FEOC) restrictions to Section 45Q credits—your business may be ineligible if the taxpayer is a prohibited foreign or foreign-influenced entity. 45Q applies to equipment that begins construction before 2033. Credits run for twelve years from the date the equipment is placed in service.

Vehicles

Commercial Clean Vehicle Credit (Section 45W)

• What it is: A tax credit for businesses that purchased an electric, plug-in hybrid, or fuel cell–powered vehicle for business use.
• Can you claim it?: You can claim a 45W credit if you acquired a clean energy passenger vehicle, van, bus, ambulance, or light-, medium-, or heavy-duty truck before October 1, 2025, but placed it in service in tax year 2026 (and did not claim it in tax year 2025). Under the OBBBA, vehicles acquired on or after October 1, 2025, do not qualify.
• Credit amount: Either: 1) 30% of the vehicle’s basis if it is not powered by a gasoline or diesel internal combustion engine (15% if it is, as with a plug-in hybrid), or 2) How much more you spent on your vehicle compared to a similar internal combustion vehicle, whichever is lower. The maximum amount you can claim is $7,500 for vehicles less than 14,000 pounds or $40,000 for vehicles 14,000 pounds or more.
• Transferable: No
• IRS form: Form 8936, Clean Vehicle Credit
• Link to IRS webpage

Alternative Fuel Vehicle Refueling Property Credit (Section 30C)

• What it is: A tax credit for installing qualified alternative refueling equipment.
• Can you claim it?: You can claim a 30C credit if you installed and placed in service qualified equipment, such as EV charging stations and certain hydrogen, propane, natural gas, and other qualifying fueling infrastructure—in an eligible low-income community or non-urban area before July 1, 2026. Under the OBBBA, property placed in service on or after that date does not qualify.
• Credit amount: Up to a maximum of $100,000 per equipment item, base credit equals 6% of the hardware and installation cost. This is increased up to 30% if your business meets PWA requirements.
• Transferable: Yes
• IRS form: Form 8911, Alternative Fuel Vehicle Refueling Property Credit
• Link to IRS webpage

Fuels

Clean Hydrogen Production Credit (Section 45V)

• What it is: A production tax credit for hydrogen produced at facilities with low greenhouse gas emissions.
• Can you claim it?: You can claim a 45V credit if you own and operate a qualified clean hydrogen production facility that produces hydrogen to be used or sold (as verified by a third party).
• Credit amount: 65¢ per kg multiplied by up to 100%, based on your facility’s lifecycle greenhouse gas emissions rate. This amount increases up to $3.28 per kg if your business meets PWA requirements.
• Transferable: Yes
• IRS form: Form 7210, Clean Hydrogen Production Credit
• Link to IRS webpage

Under Section 45V, a qualifying facility is one that was originally placed in service less than 10 years ago. After 10 years of service, your facility is no longer eligible for 45V. Under OBBBA, facilities must begin construction by December 31, 2027, to qualify.

ELECTIVE PAY

For certain clean energy tax credits, you can choose elective pay (sometimes called direct pay), in which you receive your credit as a cash refund from the IRS instead of using it to lower your business’s tax bill. When you choose elective pay for a tax credit, you can’t change your decision for five years (that tax year plus four after). Elective pay is available through tax year 2032.

Of the tax credits listed in this article, only the following are eligible for elective pay: 45Q, 45V, 45X.

Clean Fuel Production Credit (Section 45Z)

• What it is: A production tax credit for the production of low-carbon transportation fuels.
• Can you claim it?: You can claim a 45Z credit if your business is IRS-registered as a clean fuel producer and produces and sells qualifying low-emission fuels in the United States. Eligible fuels include renewable diesel, biodiesel, ethanol, sustainable aviation fuel (SAF), renewable natural gas, and other qualifying transportation fuels.
• Credit amount: 22¢ per gallon multiplied by that fuel’s emissions factor (IRS formula for calculating greenhouse gas reduction). This is increased to $1.09 per gallon multiplied by emissions factor if your business meets PWA requirements. Sustainable aviation fuel produced in 2025 and sold in 2026 is the one exception: it keeps the older, higher rate of 38¢ per gallon, or $1.91 with PWA.
• Transferable: Yes
• IRS form: Form 7218, Clean Fuel Production Credit
• Link to IRS webpage

To claim a 45Z credit, you must first register your business using Form 637, Application for Registration (For Certain Excise Tax Activities). You can only claim 45Z on fuels produced after you register your business. The 45Z credit is available until 2030.

Under the OBBBA, as of January 1, 2026, all feedstocks used in 45Z-eligible fuel production must be produced in the United States, Canada, or Mexico. In addition, the OBBBA added new Foreign Entity of Concern (FEOC) restrictions to Section 45Z credits—your business may be ineligible if the taxpayer is a prohibited foreign or foreign-influenced entity.

Small Agri-Biodiesel Producer Credit (Section 40A(b)(4))

• What it is: A tax credit for small producers of agri-biodiesel.
• Can you claim it?: You can claim a 40A(b)(4) credit if your small business is IRS-registered as an agri-biodiesel producer and produces and sells qualifying agri-biodiesel.
• Credit amount: 20¢ per gallon of agri-biodiesel.
• Transferable: Yes
• IRS form: Form 8864, Biodiesel and Renewable Diesel, or Sustainable Aviation Fuels Credit
• Link to IRS webpage

To claim a 40A(b)(4) credit, you must first register your business using activity letter AB under Part II of Form 637, Application for Registration (For Certain Excise Tax Activities).

The 40A credit expired at the end of 2024, but the OBBBA extended the small producer 40A(b)(4) credit through December 31, 2026. All feedstocks used in 40A(b)(4)-eligible fuel production must be produced in the United States, Canada, or Mexico.

Manufacturing

Advanced Manufacturing Production Credit (Section 45X)

• What it is: A tax credit for U.S.–based businesses who manufacture and sell clean energy or battery components, critical minerals, or coking coal.
• Can you claim it?: You can claim a 45X credit for manufacturing and selling any qualifying solar, wind, and battery components, inverters, coking coal, and clean energy critical minerals.
• Credit amount: Varies by component, and is generally a per-unit rate. For example: 4 cents per direct current watt for photovoltaic cells (thin film or crystalline), 7 cents per direct current watt for solar modules, $12 per square meter for wafers, and $35 per kilowatt hour for battery cells. Electrode active materials and critical minerals are credited at 10% of production costs instead, and coking coal at 2.5%.
• Transferable: Yes
• IRS form: Form 7207, Advanced Manufacturing Production Credit
• Link to IRS webpage

You can’t claim both the 45X credit and the 48C Advanced Energy Project credit for the same facility.

Under OBBBA, wind components sold after December 31, 2027, and coking coal produced after December 31, 2029, will no longer be eligible. For other materials, elimination or phase-out is based on these schedules:

• Other eligible components:
  • Sold in 2030: 75%
  • Sold in 2031: 50%
  • Sold in 2032: 25%
  • Sold after December 31, 2032: 0%
• Other critical minerals:
  • Produced in 2031: 75%
  • Produced in 2032: 50%
  • Produced in 2033: 25%
  • Produced after December 31, 2033: 0%

Additional considerations under the OBBBA

While the 45X credit remains broadly available, the OBBBA implemented several major changes to eligibility:

• Stricter Foreign Entity of Concern (FEOC) rules mean your business may be ineligible if your project or eligible components receive too much material assistance from a prohibited foreign entity.
• Coking coal is now eligible for the 45X credit until January 1, 2030.
• New domestic content requirements will go into effect starting tax year 2027: If you sell a primary eligible component that you created by integrating or assembling secondary eligible components, at least 65% of the secondary components’ material cost must come from eligible components manufactured in the U.S. for you to claim 45X on them. You may still claim 45X on the primary component, regardless.

Construction and renovations

Energy Efficient Commercial Buildings Deduction (Section 179D)

• What it is: A tax deduction for the cost of installing energy-efficient systems in new or existing commercial buildings.
• Can you claim it?: You can claim a 179D deduction for qualifying buildings if you began construction on eligible improvements to interior lighting, HVAC, hot water, or the building envelope before July 1, 2026, and you either own the building or were primarily responsible for designing the systems in a building owned by certain tax-exempt or government entities. Under the OBBBA, projects that begin construction on or after July 1, 2026, do not qualify.
• Deduction amount: The 179D deduction is inflation-adjusted. For taxable years beginning in 2026, the amount is either: 1) the cost of the installed property, or 2) $0.59–$1.19 per square foot (based on percentage of energy saved), whichever is lower. The latter deduction amount increases to $2.97–$5.94 per square foot if your business meets PWA requirements.
• Transferable: No (deductions are not transferable)
• IRS form: Form 7205, Energy Efficient Commercial Buildings Deduction
• Link to IRS webpage

New Energy Efficient Homes Credit (Section 45L)

• What it is: A tax credit for the construction of new energy-efficient homes.
• Can you claim it?: You can claim a 45L credit if you’re an eligible contractor that built or substantially reconstructed eligible energy-efficient homes that meet Energy Star or DOE Zero Energy Ready building standards that were sold or rented before July 1, 2026. Under the OBBBA, homes sold or rented on or after that date do not qualify.
• Credit amount: For single-family homes: $2,500 for new homes meeting Energy Star standards, $5,000 for zero-energy homes. For multi-family homes: $500 per unit for Energy Star and $1,000 per unit for zero-energy, increased to $2,500 and $5,000 per unit if your business meets the prevailing wage requirement.
• Transferable: No
• IRS form: Form 8908, Energy Efficient Home Credit
• Link to IRS webpage

How to claim a clean energy tax incentive

If you provide documentation proving that you met all eligibility requirements, then you can claim a clean energy tax incentive on the appropriate form for the tax year when, as applicable, the project was completed, property was put in service, fuel or power was produced and sold, or components were sold. (Note that 45L is eligible when the home is sold, not when the project was completed.)

1. Confirm your project qualifies. Before contracting a project or purchasing property, determine whether it is eligible for one of the tax credits or deductions above. Look for state and local incentives, too—these may affect your return on federal incentives. Note that the 45Z credit requires you to register your business with the IRS before qualifying production starts.
2. Confirm whether your business meets PWA requirements. For most clean energy credits, meeting prevailing wage and apprenticeship (PWA) requirements can increase your credit amount up to five times.
3. Save all documentation related to the project, including contracts and invoices, proofs of payment, equipment specifications and certifications, installation and inspection records, permits (if applicable), and compliance documentation (if applicable).
4. Consult with a tax professional. Clean energy tax incentives involve navigating a lot of forms and policy—a licensed accountant or tax attorney can help you determine your eligibility and maximize returns on incentives.
5. File the appropriate tax form—each incentive requires a particular form, which we’ve included in the list above. Some forms are used for multiple tax credits.

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Frequently asked questions

Information current as of September 2026. Eligibility and credit amounts may change.

We thank Ramon Liriano Jr. and Joel Salas for providing feedback on this article. (Ramon previously helped us explain small business tax deductions.)

Ramon and Joel are managing partners at Elevated Tax Strategies, a comprehensive financial and tax services firm that specializes in serving small businesses. Elevated Tax Strategies is a proud Bluevine Accountant Partner, featured in our accountant directory. Reach out to see how Elevated Tax Strategies can help you make the most of your money.