IRS Releases Draft Regulation, FAQ on Transferability of Energy Tax Credits

Regulations
Published
Contact: J.P. Delmore
[email protected]
AVP, Government Affairs
(202) 266-8412

The Internal Revenue Service released a draft regulation and a list of frequently asked questions regarding the new election taxpayers may take to transfer certain energy tax incentives to other parties. For purposes of residential construction, this option generally applies to the Investment Tax Credit (Sections 48 and 48E) and the Production Tax Credit (Sections 45 and 45Y).

Transferability allows a taxpayer who generates certain clean energy tax credits to elect to transfer (i.e., sell) all or a portion of a tax credit to an unrelated third-party transferee (i.e., buyer) in exchange for cash. In such transactions, the buyer and seller negotiate and agree to the terms and pricing.

This guidance also includes information on the “elective pay” option available to non-profits, state and local governments, and certain other eligible entities. Elective pay allows entities that do not have tax liability to take advantage of these clean energy tax incentives through a direct payment from the Treasury Department.

The Investment Tax Credit and the Production Tax Credit are federal tax credits for installing qualifying clean energy technology, such as solar panels, as part of a commercial project, such as a multifamily building.

The Treasury Department also announced it intends to hold a series of webinars on the topic during the summer, beginning Thursday, June 29. Information on how to register can be found here.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

IBS

Jul 27, 2026

Precision Planning Keeps The New American Home 2027 on Track

As construction quickly progresses on the 2027 exhibit home of the International Builders' Show, the project is strategically navigating one of its most demanding phases: the rough-in.

Advocacy | Economics

Jul 24, 2026

Podcast: Exploring Next Steps on the ROAD to Housing

On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez discuss what’s next following the enactment of the 21st Century ROAD to Housing Act, how state and local HBAs are tackling key issues in their areas, and the latest economic data.

View all

Latest Economic News

Economics

Jul 27, 2026

Share of Apartments Built in Buildings with 50+ Units Moves Higher in 2025

Following the highest number of multifamily completions in nearly 40 years in 2024, completions declined in 2025 to 484,000, according to NAHB analysis of the Census Bureau’s Survey of Construction. For the ninth consecutive year, a majority of new multifamily units were in buildings with 50 or more units (labeled as high-density buildings) at 57%, the highest share since 2021.

Economics

Jul 24, 2026

New Home Sales Edge Higher as Affordability Challenges Persist

Affordability challenges continued to weigh on the new-home market in June, as elevated mortgage rates, rising inflation and broader economic uncertainty kept many prospective buyers on the sidelines.

Economics

Jul 23, 2026

Acquisitions Increasing Among Home Builders

At the start of 2026, most home builders predicted that high mortgage rates and hesitancy among buyers would be their toughest challenges this year. They weren’t wrong: the 30-year mortgage rate averaged 6.49% in June and housing demand has weakened, as reflected by flat mortgage applications in the first half of the year.