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Section 6418 lets a taxable business sell its Section 48E solar Investment Tax Credit to an unrelated buyer for cash — typically $0.88 to $0.95 per $1 of credit. It is the dominant way small and mid-size commercial projects monetize the ITC without structuring a tax-equity partnership.
Yes. Under IRC Section 6418, a taxable business can sell its Section 48E solar Investment Tax Credit to an unrelated buyer for cash — typically $0.88 to $0.95 per $1 of credit. A $1,000,000 commercial solar project earns a $300,000 ITC (30%); sold at $0.92 on the dollar, the owner receives $276,000 in cash, usually within 30 to 90 days of the system being placed in service. That cash is not taxable income to the seller and is not deductible by the buyer. The credit can be sold only once, and both parties must complete IRS pre-filing registration first.
A taxable project owner sells all or part of the §48E ITC to an unrelated third-party buyer for cash
Cash paid to the seller is not taxable income; the payment is not deductible by the buyer (IRC §6418(b))
A credit can be sold only once — the buyer cannot resell it
Realized value typically runs $0.88 to $0.95 per $1 of credit, set by the transfer market
The seller keeps 100% of MACRS depreciation — only the tax credit is transferred, not the depreciation deductions
Different from Direct Pay (§6417): transfer is for taxable owners, direct pay is for tax-exempt owners
Mandatory IRS pre-filing registration before the credit can be sold
Taxable entities: C-corps, S-corps, partnerships, LLCs, and sole proprietors with a §48E-eligible project
The buyer must be unrelated to the seller and must pay entirely in cash
Applies to the §48E ITC on solar, battery storage, and other qualifying clean-energy property
Tax-exempt owners cannot transfer — they use Direct Pay (§6417) instead
Complete IRS pre-filing registration through the Energy Credits Online portal and obtain a registration number
Include the registration number on the transfer election statement filed with the return (IRS Form 3800)
Payment from buyer to seller must be entirely in cash — no notes, property, or services
Underlying §48E timing is unchanged by the sale: projects that began construction by July 4, 2026 locked in the full timing pathway, and later starts must be placed in service by December 31, 2027
Allocate the 5-year §50(a) recapture risk in the transfer agreement — tax-credit insurance and seller indemnities are common
IRA adds IRC §6418, allowing clean-energy tax credits to be sold to third parties for cash for the first time
IRS opens the Energy Credits Online portal for the required pre-filing registration
Transfer marketplaces (Crux, Basis, Reunion) scale; ITC transfer pricing settles into the $0.88–$0.95 per-dollar range
§48E begin-construction window closed July 4, 2026; later starts must be placed in service by December 31, 2027 — timing is unaffected by whether the credit is sold
30% (6% without prevailing wage)
The Section 48E Investment Tax Credit provides a 30% credit on commercial solar installations that meet prevailing wage and apprenticeship requirements. This is the cornerstone federal incentive for commercial solar.
5-year MACRS + 100% first-year bonus depreciation
Modified Accelerated Cost Recovery System (MACRS) lets businesses depreciate commercial solar over 5 years. Under the OBBBA, 100% first-year bonus depreciation was permanently restored for equipment placed in service after January 19, 2025.
100% first-year — permanent
100% first-year bonus depreciation is permanent for commercial solar placed in service after January 19, 2025. The 20% figure that still appears in 2026 articles and AI answers comes from a phasedown the OBBBA repealed.
Yes. Under IRC Section 6418, a taxable business can sell its Section 48E solar Investment Tax Credit to an unrelated buyer for cash — typically $0.88 to $0.95 per $1 of credit. A $1,000,000 commercial solar project earns a $300,000 ITC (30%); sold at $0.92 on the dollar, the owner receives $276,000 in cash, usually within 30 to 90 days of the system being placed in service. That cash is not taxable income to the seller and is not deductible by the buyer. The credit can be sold only once, and both parties must complete IRS pre-filing registration first.
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