IRS Releases Draft Regulation, FAQ on Transferability of Energy Tax Credits
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.
Latest from NAHBNow
Sales of newly built single-family homes increased 6.4% in August to a seasonally adjusted annual rate of 684,000, following an upwardly revised July estimate, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales was 2% lower than a year earlier.
The smart home is entering a new era and builders have an opportunity to get ahead of what home owners will expect next. Join the NAHB Leading Suppliers Council for a free, two-part webinar on Monday, Sept. 28, to get a closer look at the technologies shaping the future of housing.
Latest Economic News
Adults ages 55 and older make up a large and growing share of the U.S. population and play an important role in the U.S. housing market. In 2024, around 103 million Americans were ages 55 or older, ranging from adults still in the labor force to retirees.
Single-family homes started construction in 2025 typically had two full bathrooms, according to the U.S. Census Bureau’s Annual Survey of Construction.
The remodeling industry is taking on a larger role within the residential construction sector. Structural tailwinds, such as an aging housing stock, the growing trend of aging-in-place among older home owners, and record-high housing wealth, will continue to grow remodeling’s market share further.