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
Aug 12, 2025
Core Inflation Accelerates Amid Tariff PressureCore inflation picked up to its largest monthly increase since January and fastest annual pace since February. Meanwhile, housing inflation continued to show signs of cooling.
Aug 12, 2025
2026 Show Home Takes Shape in OrlandoConstruction is moving full-speed ahead on The New American Home 2026. Located in Winter Park, Fla., this ambitious project is implementing cutting-edge design while sticking to an aggressive timeline — and the build team has no intention of slowing down.
Latest Economic News
Aug 11, 2025
Market Share for Modular and Other Non-Site Built Housing in 2024The total market share of non-site built single-family homes (modular and panelized) was just 3% of single-family homes in 2024, according to completion data from the Census Bureau Survey of Construction data and NAHB analysis.
Aug 08, 2025
Foundation Types in 2024: Slabs Continue to Rise, Crawl Spaces DeclineIn 2024, 73% of new single-family homes started were built on slab foundations, according to NAHB analysis of the U.S. Census Bureau’s Survey of Construction (SOC).
Aug 08, 2025
Weaker Demand for Residential Mortgages in Second QuarterIn the second quarter of 2025, overall demand for residential mortgages was weaker, while lending standards for most types of residential mortgages were essentially unchanged, according to the recent release of the Senior Loan Officer Opinion Survey (SLOOS).