---
kind: "section"
citation: "26 U.S.C. § 45Y"
title: "26"
title_heading: "Internal Revenue Code"
number: "45Y"
heading: "Clean electricity production credit"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/45Y"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter A — Determination of Tax Liability"
  - "Part IV — Credits Against Tax"
  - "Subpart D — Business Related Credits"
---

# §45Y. Clean electricity production credit

- (a) **Amount of credit—**
  - (1) **In general—** For purposes of [section 38](/usc/26/38.md), the clean electricity production credit for any taxable year is an amount equal to the product of—
    - (A) the kilowatt hours of electricity—
      - (i) [produced](/usc/26/864.md?p=a) by the [taxpayer](/usc/26/1313.md?p=b) at a qualified facility, and
      - (ii)
        - (I) sold by the [taxpayer](/usc/26/1313.md?p=b) to an [unrelated person](/usc/26/971.md?p=f) during the taxable year, or
        - (II) in the case of a qualified facility which is equipped with a metering device which is owned and operated by an [unrelated person](/usc/26/971.md?p=f), sold, consumed, or stored by the [taxpayer](/usc/26/1313.md?p=b) during the taxable year, multiplied by
    - (B) the applicable amount with respect to such qualified facility.
  - (2) **Applicable amount—**
    - (A) **Base amount—** Subject to [subsection (g)(7)](#g-7), in the case of any qualified facility which is not described in clause [(i)](#a-2-B-i) or [(ii)](#a-2-B-ii) of subparagraph (B) and does not satisfy the requirements described in [clause (iii)](#a-2-B-iii) of such subparagraph, the applicable amount shall be 0.3 cents.
    - (B) **Alternative amount—** Subject to [subsection (g)(7)](#g-7), in the case of any qualified facility—
      - (i) with a maximum net output of less than 1 megawatt (as measured in alternating current),
      - (ii) the construction of which begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs [(9)](#g-9) and [(10)](#g-10) of subsection (g), or
      - (iii) which—
        - (I) satisfies the requirements under [paragraph (9)](#g-9) of subsection (g), and
        - (II) with respect to the construction of such facility, satisfies the requirements under [paragraph (10)](#g-10) of subsection (g),

      the applicable amount shall be 1.5 cents.

- (b) **Qualified facility—**
  - (1) **In general—**
    - (A) **Definition—** Subject to subparagraphs [(B)](#b-1-B), [(C)](#b-1-C), and [(D)](#b-1-D), the term “qualified facility” means a facility owned by the [taxpayer](/usc/26/1313.md?p=b)—
      - (i) which is used for the generation of electricity,
      - (ii) which is placed in service after December 31, 2024, and
      - (iii) for which the greenhouse gas emissions rate (as determined under [paragraph (2)](#b-2)) is not greater than zero.
    - (B) **10-year production credit—** For purposes of this section, a facility shall only be treated as a qualified facility during the 10-year period beginning on the date the facility was originally placed in service.
    - (C) **Expansion of facility; incremental production—** The term “qualified facility” shall include either of the following in connection with a facility described in [subparagraph (A)](#b-1-A) (without regard to [clause (ii)](#b-1-C-ii) of such subparagraph) which was placed in service before January 1, 2025, but only to the extent of the increased amount of electricity [produced](/usc/26/864.md?p=a) at the facility by reason of the following:
      - (i) A new unit which is placed in service after December 31, 2024.
      - (ii) Any additions of capacity which are placed in service after December 31, 2024.
    - (D) **Determination of capacity—** For purposes of [subparagraph (C)](#b-1-C), additions of capacity of a facility shall be determined in any reasonable manner, including based on—
      - (i) [determinations](/usc/26/1313.md?p=a) by, or reports to, the Federal Energy Regulatory Commission (including interconnection agreements), the Nuclear Regulatory Commission, or any similar entity, reflecting additions of capacity,
      - (ii) [determinations](/usc/26/1313.md?p=a) or reports reflecting additions of capacity made by an independent professional engineer,
      - (iii) reports to, or issued by, regional transmission [organizations](/usc/26/414.md?p=m-6-A) or independent system operators reflecting additions of capacity, or
      - (iv) any other method or manner provided by the Secretary.
    - (E) **1 Coordination with other credits—** The term “qualified facility” shall not include any facility for which a credit determined under section [45](/usc/26/45.md), [45J](/usc/26/45J.md), [45Q](/usc/26/45Q.md), [45U](/usc/26/45U.md), [48](/usc/26/48.md), [48A](/usc/26/48A.md), or [48E](/usc/26/48E.md) is allowed under [section 38](/usc/26/38.md) for the taxable year or any prior taxable year.
    - (E) **1 Material assistance from prohibited foreign entities—** The term “qualified facility” shall not include any facility for which construction begins after December 31, 2025, if the construction of such facility includes any material assistance from a prohibited [foreign entity](/usc/26/1473.md?p=5) (as defined in [section 7701(a)(52)](/usc/26/7701.md?p=a-52)).
  - (2) **Greenhouse gas emissions rate—**
    - (A) **In general—** For purposes of this section, the term “greenhouse gas emissions rate” means the amount of greenhouse gases emitted into the atmosphere by a facility in the production of electricity, expressed as grams of CO<sub>2</sub>e per KWh.
    - (B) **Fuel combustion and gasification—** In the case of a facility which produces electricity through combustion or gasification, the greenhouse gas emissions rate for such facility shall be equal to the net rate of greenhouse gases emitted into the atmosphere by such facility (taking into account lifecycle greenhouse gas emissions, as described in section 211(o)(1)(H) of the Clean Air Act ([42 U.S.C. 7545(o)(1)(H)](/usc/42/7545.md?p=o-1-H))) in the production of electricity, expressed as grams of CO<sub>2</sub>e per KWh.
    - (C) **Establishment of emissions rates for facilities—**
      - (i) **Publishing emissions rates—** The Secretary shall annually publish a table that sets forth the greenhouse gas emissions rates for types or categories of facilities, which a [taxpayer](/usc/26/1313.md?p=b) shall use for purposes of this section.
      - (ii) **Provisional emissions rate—** In the case of any facility for which an emissions rate has not been established by the Secretary, a [taxpayer](/usc/26/1313.md?p=b) which owns such facility may file a petition with the Secretary for [determination](/usc/26/1313.md?p=a) of the emissions rate with respect to such facility.
      - (iii) **Existing studies—** For purposes of [clause (i)](#b-2-C-i), in determining greenhouse gas emissions rates for types or categories of facilities for the purpose of determining whether a facility satisfies the requirements under [paragraph (1)](#b-1), the Secretary shall consider studies published on or before the date of enactment of this clause which demonstrate a net lifecycle greenhouse gas emissions rate which is not greater than zero using widely accepted lifecycle assessment concepts, such as concepts described in standards developed by the International [Organization](/usc/26/414.md?p=m-6-A) for Standardization.
    - (D) **Carbon capture and sequestration equipment—** For purposes of this subsection, the amount of greenhouse gases emitted into the atmosphere by a facility in the production of electricity shall not include any qualified carbon dioxide that is captured by the [taxpayer](/usc/26/1313.md?p=b) and—
      - (i) pursuant to any regulations established under [paragraph (2)](/usc/26/45Q.md?p=f-2) of section 45Q(f), disposed of by the [taxpayer](/usc/26/1313.md?p=b) in secure geological storage, or
      - (ii) utilized by the [taxpayer](/usc/26/1313.md?p=b) in a manner described in paragraph (5) of such section.
- (c) **Inflation adjustment—**
  - (1) **In general—** In the case of a calendar year beginning after 2024, the 0.3 cent amount in [paragraph (2)(A)](#a-2-A) of subsection (a) and the 1.5 cent amount in [paragraph (2)(B)](#a-2-B) of such subsection shall each be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale, consumption, or storage of the electricity occurs. If the 0.3 cent amount as increased under this paragraph is not a multiple of 0.05 cent, such amount shall be rounded to the nearest multiple of 0.05 cent. If the 1.5 cent amount as increased under this paragraph is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent.
  - (2) **Annual computation—** The Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor for such calendar year in accordance with this subsection.
  - (3) **Inflation adjustment factor—** The term “inflation adjustment factor” means, with respect to a calendar year, a fraction the numerator of which is the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 1992. The term “GDP implicit price deflator” means the most recent revision of the implicit price deflator for the gross domestic product as computed and published by the Department of Commerce before March 15 of the calendar year.
- (d) **Credit phase-out—**
  - (1) **In general—** Subject to [paragraph (4)](#d-4), the amount of the clean electricity production credit under [subsection (a)](#a) for any qualified facility the construction of which begins during a calendar year described in [paragraph (2)](#d-2) shall be equal to the product of—
    - (A) the amount of the credit determined under [subsection (a)](#a) without regard to this subsection, multiplied by
    - (B) the phase-out percentage under [paragraph (2)](#d-2).
  - (2) **Phase-out percentage—** The phase-out percentage under this paragraph is equal to—
    - (A) for a facility the construction of which begins during the first calendar year following the applicable year, 100 percent,
    - (B) for a facility the construction of which begins during the second calendar year following the applicable year, 75 percent,
    - (C) for a facility the construction of which begins during the third calendar year following the applicable year, 50 percent, and
    - (D) for a facility the construction of which begins during any calendar year subsequent to the calendar year described in [subparagraph (C)](#d-2-C), 0 percent.
  - (3) **Applicable year—** For purposes of this subsection, the term “applicable year” means calendar year 2032.
  - (4) **Termination for wind and solar facilities—**
    - (A) **In general—** This section shall not apply with respect to any applicable facility placed in service after December 31, 2027.
    - (B) **Applicable facility—** For purposes of this paragraph, the term “applicable facility” means a qualified facility which—
      - (i) uses wind to produce electricity (within the meaning of such term as used in [section 45(d)(1)](/usc/26/45.md?p=d-1), as determined without regard to any requirement under such section with respect to the date on which construction of [property](/usc/26/317.md?p=a) begins), or
      - (ii) uses solar energy to produce electricity (within the meaning of such term as used in [section 45(d)(4)](/usc/26/45.md?p=d-4), as determined without regard to any requirement under such section with respect to the date on which construction of [property](/usc/26/317.md?p=a) begins).
- (e) **Definitions—** For purposes of this section:
  - (1) **CO2e per KWh—** The term “CO<sub>2</sub>e per KWh” means, with respect to any greenhouse gas, the equivalent carbon dioxide (as determined based on global warming potential) per kilowatt hour of electricity [produced](/usc/26/864.md?p=a).
  - (2) **Greenhouse gas—** The term “greenhouse gas” has the same meaning given such term under section 211(o)(1)(G) of the Clean Air Act ([42 U.S.C. 7545(o)(1)(G)](/usc/42/7545.md?p=o-1-G)), as in effect on the date of the enactment of this section.
  - (3) **Qualified carbon dioxide—** The term “qualified carbon dioxide” means carbon dioxide captured from an industrial source which—
    - (A) would otherwise be released into the atmosphere as industrial emission of greenhouse gas,
    - (B) is measured at the source of capture and verified at the point of disposal or utilization, and
    - (C) is captured and disposed or utilized within the [United States](/usc/26/993.md?p=g) (within the meaning of [section 638(1)](/usc/26/638.md?p=1)) or a possession of the [United States](/usc/26/993.md?p=g) (within the meaning of [section 638(2)](/usc/26/638.md?p=2)).
- (f) **Guidance—** Not later than January 1, 2025, the Secretary shall issue guidance regarding implementation of this section, including calculation of greenhouse gas emission rates for qualified facilities and [determination](/usc/26/1313.md?p=a) of clean electricity production credits under this section.
- (g) **Special rules—**
  - (1) **Only production in the United States taken into account—** Consumption, sales, or storage shall be taken into account under this section only with respect to electricity the production of which is within—
    - (A) the [United States](/usc/26/993.md?p=g) (within the meaning of [section 638(1)](/usc/26/638.md?p=1)), or
    - (B) a possession of the [United States](/usc/26/993.md?p=g) (within the meaning of [section 638(2)](/usc/26/638.md?p=2)).
  - (2) **Combined heat and power system property—**
    - (A) **In general—** For purposes of [subsection (a)](#a)—
      - (i) the kilowatt hours of electricity [produced](/usc/26/864.md?p=a) by a [taxpayer](/usc/26/1313.md?p=b) at a qualified facility shall include any production in the form of useful thermal energy by any combined heat and power system [property](/usc/26/317.md?p=a) within such facility, and
      - (ii) the amount of greenhouse gases emitted into the atmosphere by such facility in the production of such useful thermal energy shall be included for purposes of determining the greenhouse gas emissions rate for such facility.
    - (B) **Combined heat and power system property—** For purposes of this paragraph, the term “combined heat and power system [property](/usc/26/317.md?p=a)” has the same meaning given such term by [section 48(c)(3)](/usc/26/48.md?p=c-3) (without regard to subparagraphs (A)(iv), [(B)](#g-2-B), and (D) thereof).
    - (C) **Conversion from BTU to KWh—**
      - (i) **In general—** For purposes of [subparagraph (A)(i)](#g-2-A-i), the amount of kilowatt hours of electricity [produced](/usc/26/864.md?p=a) in the form of useful thermal energy shall be equal to the quotient of—
        - (I) the total useful thermal energy [produced](/usc/26/864.md?p=a) by the combined heat and power system [property](/usc/26/317.md?p=a) within the qualified facility, divided by
        - (II) the heat rate for such facility.
      - (ii) **Heat rate—** For purposes of this subparagraph, the term “heat rate” means the amount of energy used by the qualified facility to generate 1 kilowatt hour of electricity, expressed as British thermal units per net kilowatt hour generated.
  - (3) **Production attributable to the taxpayer—** In the case of a qualified facility in which more than 1 person has an ownership [interest](/usc/26/856.md?p=f-1), except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership [interests](/usc/26/856.md?p=f-1) in the gross sales from such facility.
  - (4) **Related persons—** Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under [section 52(b)](/usc/26/52.md?p=b). In the case of a corporation which is a member of an [affiliated group](/usc/26/864.md?p=e-5-A) of corporations filing a consolidated return, such corporation shall be treated as selling electricity to an [unrelated person](/usc/26/971.md?p=f) if such electricity is sold to such a person by another member of such group.
  - (5) **Pass-thru in the case of estates and trusts—** Under regulations prescribed by the Secretary, rules similar to the rules of [subsection (d)](/usc/26/52.md?p=d) of section 52 shall apply.
  - (6) **Allocation of credit to patrons of agricultural cooperative—**
    - (A) **Election to allocate—**
      - (i) **In general—** In the case of an eligible cooperative [organization](/usc/26/414.md?p=m-6-A), any portion of the credit determined under [subsection (a)](#a) for the taxable year may, at the election of the [organization](/usc/26/414.md?p=m-6-A), be apportioned among patrons of the [organization](/usc/26/414.md?p=m-6-A) on the basis of the amount of business done by the patrons during the taxable year.
      - (ii) **Form and effect of election—** An election under [clause (i)](#g-6-A-i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the [organization](/usc/26/414.md?p=m-6-A) designates the apportionment as such in a written notice mailed to its patrons during the payment period described in [section 1382(d)](/usc/26/1382.md?p=d).
    - (B) **Treatment of organizations and patrons—** The amount of the credit apportioned to any patrons under [subparagraph (A)](#g-6-A)—
      - (i) shall not be included in the amount determined under [subsection (a)](#a) with respect to the [organization](/usc/26/414.md?p=m-6-A) for the taxable year, and
      - (ii) shall be included in the amount determined under [subsection (a)](#a) for the first taxable year of each patron ending on or after the last day of the payment period (as defined in [section 1382(d)](/usc/26/1382.md?p=d)) for the taxable year of the [organization](/usc/26/414.md?p=m-6-A) or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.
    - (C) **Special rules for decrease in credits for taxable year—** If the amount of the credit of a cooperative [organization](/usc/26/414.md?p=m-6-A) determined under [subsection (a)](#a) for a taxable year is less than the amount of such credit shown on the return of the cooperative [organization](/usc/26/414.md?p=m-6-A) for such year, an amount equal to the excess of—
      - (i) such reduction, over
      - (ii) the amount not apportioned to such patrons under [subparagraph (A)](#g-6-A) for the taxable year,

      shall be treated as an increase in tax imposed by this chapter on the [organization](/usc/26/414.md?p=m-6-A). Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter.

    - (D) **Eligible cooperative defined—** For purposes of this section, the term “eligible cooperative” means a cooperative [organization](/usc/26/414.md?p=m-6-A) described in [section 1381(a)](/usc/26/1381.md?p=a) which is owned more than 50 percent by agricultural producers or by entities owned by agricultural producers. For this purpose an entity owned by an agricultural producer is one that is more than 50 percent owned by agricultural producers.
  - (7) **Increase in credit in energy communities—** In the case of any qualified facility which is located in an energy community (as defined in [section 45(b)(11)(B)](/usc/26/45.md?p=b-11-B)), for purposes of determining the amount of the credit under [subsection (a)](#a) with respect to any electricity [produced](/usc/26/864.md?p=a) by the [taxpayer](/usc/26/1313.md?p=b) at such facility during the taxable year, the applicable amount under [paragraph (2)](#g-2) of such subsection shall be increased by an amount equal to 10 percent of the amount otherwise in effect under such paragraph.
  - (8) **Credit reduced for tax-exempt bonds—** Rules similar to the rules of [section 45(b)(3)](/usc/26/45.md?p=b-3) shall apply.
  - (9) **Wage requirements—** Rules similar to the rules of [section 45(b)(7)](/usc/26/45.md?p=b-7) shall apply.
  - (10) **Apprenticeship requirements—** Rules similar to the rules of [section 45(b)(8)](/usc/26/45.md?p=b-8) shall apply.
  - (11) **Domestic content bonus credit amount—**
    - (A) **In general—** In the case of any qualified facility which satisfies the requirement under [subparagraph (B)(i)](#g-11-B-i), the amount of the credit determined under [subsection (a)](#a) shall be increased by an amount equal to 10 percent of the amount so determined (as determined without application of [paragraph (7)](#g-7)).
    - (B) **Requirement—**
      - (i) **In general—** The requirement described in this subclause is satisfied with respect to any qualified facility if the [taxpayer](/usc/26/1313.md?p=b) certifies to the Secretary (at such time, and in such form and manner, as the Secretary may prescribe) that any steel, iron, or manufactured product which is a component of such facility (upon completion of construction) was [produced](/usc/26/864.md?p=a) in the [United States](/usc/26/993.md?p=g) (as determined under [section 661 of title 49](https://uscode.house.gov/view.xhtml?req=(/us/usc/t49/s661)), Code of Federal Regulations).
      - (ii) **Steel and iron—** In the case of steel or iron, [clause (i)](#g-11-B-i) shall be applied in a manner consistent with section 661.5 of title 49, Code of Federal Regulations.
      - (iii) **Manufactured product—** For purposes of [clause (i)](#g-11-B-i), the manufactured products which are components of a qualified facility upon completion of construction shall be deemed to have been [produced](/usc/26/864.md?p=a) in the [United States](/usc/26/993.md?p=g) if not less than the adjusted percentage (as determined under [subparagraph (C)](#g-11-C)) of the total costs of all such manufactured products of such facility are attributable to manufactured products (including components) which are mined, [produced](/usc/26/864.md?p=a), or manufactured in the [United States](/usc/26/993.md?p=g).
    - (C) **Adjusted percentage—**
      - (i) **In general—** Subject to subclause (ii), for purposes of [subparagraph (B)(iii)](#g-11-B-iii), the adjusted percentage shall be—
        - (I) in the case of a facility the construction of which begins before January 1, 2025, 40 percent,
        - (II) in the case of a facility the construction of which begins after December 31, 2024, and before January 1, 2026, 45 percent,
        - (III) in the case of a facility the construction of which begins after December 31, 2025, and before January 1, 2027, 50 percent, and
        - (IV) in the case of a facility the construction of which begins after December 31, 2026, 55 percent.
      - (ii) **Offshore wind facility—** For purposes of [subparagraph (B)(iii)](#g-11-B-iii), in the case of a qualified facility which is an offshore wind facility, the adjusted percentage shall be—
        - (I) in the case of a facility the construction of which begins before January 1, 2025, 20 percent,
        - (II) in the case of a facility the construction of which begins after December 31, 2024, and before January 1, 2026, 27.5 percent,
        - (III) in the case of a facility the construction of which begins after December 31, 2025, and before January 1, 2027, 35 percent,
        - (IV) in the case of a facility the construction of which begins after December 31, 2026, and before January 1, 2028, 45 percent, and
        - (V) in the case of a facility the construction of which begins after December 31, 2027, 55 percent.
  - (12) **Phaseout for elective payment—**
    - (A) **In general—** In the case of a [taxpayer](/usc/26/1313.md?p=b) making an election under [section 6417](/usc/26/6417.md) with respect to a credit under this section, the amount of such credit shall be replaced with—
      - (i) the [value](/usc/26/851.md?p=c-4) of such credit (determined without regard to this paragraph), multiplied by
      - (ii) the [applicable percentage](/usc/26/414.md?p=l-2-B).
    - (B) **100 percent applicable percentage for certain qualified facilities—** In the case of any qualified facility—
      - (i) which satisfies the requirements under [paragraph (11)(B)](#g-11-B), or
      - (ii) with a maximum net output of less than 1 megawatt (as measured in alternating current),

      the [applicable percentage](/usc/26/414.md?p=l-2-B) shall be 100 percent.

    - (C) **Phased domestic content requirement—** Subject to [subparagraph (D)](#g-12-D), in the case of any qualified facility which is not described in [subparagraph (B)](#g-12-B), the [applicable percentage](/usc/26/414.md?p=l-2-B) shall be—
      - (i) if construction of such facility began before January 1, 2024, 100 percent,
      - (ii) if construction of such facility began in calendar year 2024, 90 percent,
      - (iii) if construction of such facility began in calendar year 2025, 85 percent, and
      - (iv) if construction of such facility began after December 31, 2025, 0 percent.
    - (D) **Exception—**
      - (i) **In general—** For purposes of this paragraph, the Secretary shall provide exceptions to the requirements under this paragraph if—
        - (I) the inclusion of steel, iron, or manufactured products which are [produced](/usc/26/864.md?p=a) in the [United States](/usc/26/993.md?p=g) increases the overall costs of construction of qualified facilities by more than 25 percent, or
        - (II) relevant steel, iron, or manufactured products are not [produced](/usc/26/864.md?p=a) in the [United States](/usc/26/993.md?p=g) in sufficient and reasonably available quantities or of a satisfactory quality.
      - (ii) **Applicable percentage—** In any case in which the Secretary provides an exception pursuant to [clause (i)](#g-12-D-i), the [applicable percentage](/usc/26/414.md?p=l-2-B) shall be 100 percent.
  - (13) **Restrictions relating to prohibited foreign entities—**
    - (A) **In general—** No credit shall be determined under [subsection (a)](#a) for any taxable year if the [taxpayer](/usc/26/1313.md?p=b) is—
      - (i) a specified [foreign entity](/usc/26/1473.md?p=5) (as defined in [section 7701(a)(51)(B)](/usc/26/7701.md?p=a-51-B)), or
      - (ii) a foreign-influenced entity (as defined in [section 7701(a)(51)(D)](/usc/26/7701.md?p=a-51-D), without regard to clause (i)(II) thereof).
    - (B) **Effective control—** In the case of a [taxpayer](/usc/26/1313.md?p=b) for which [section 7701(a)(51)(D)(i)(II)](/usc/26/7701.md?p=a-51-D-i-II) is determined to apply for any taxable year, no credit shall be determined under [subsection (a)](#a) for such taxable year if such [determination](/usc/26/1313.md?p=a) relates to a qualified facility described in [subsection (b)(1)](#b-1).
- (h) **Denial of credit for wind and solar leasing arrangements—** No credit shall be determined under this section with respect to any production of electricity during the taxable year with respect to [property](/usc/26/317.md?p=a) described in paragraph [(1)](/usc/26/25D.md?p=d-1) or [(4)](/usc/26/25D.md?p=d-4) of section 25D(d) (as applied by substituting “lessee” for “[taxpayer](/usc/26/1313.md?p=b)”) if the [taxpayer](/usc/26/1313.md?p=b) rents or leases such [property](/usc/26/317.md?p=a) to a third party during such taxable year.

## Footnotes

[^1]: So in original. There are two subpars. (E).

## Source credit

(Added Pub. L. 117–169, title I, § 13701(a), Aug. 16, 2022, 136 Stat. 1982; amended Pub. L. 119–21, title VII, § 70512(a), (b), (d), (e), (g), July 4, 2025, 139 Stat. 252, 253, 266, 267.)

## Notes

### Editorial Notes

### References in Text

The date of enactment of this clause, referred to in subsec. (b)(2)(C)(iii), is the date of enactment of Pub. L. 119–21, which was approved July 4, 2025.

The date of the enactment of this section, referred to in subsec. (e)(2), is the date of enactment of Pub. L. 117–169, which was approved Aug. 16, 2022.

### Amendments

2025—Subsec. (b)(1)(D). Pub. L. 119–21, § 70512(g)(2), added subpar. (D). Former subpar. (D) redesignated (E) relating to coordination with other credits.

Subsec. (b)(1)(E). Pub. L. 119–21, § 70512(g)(1), redesignated subpar. (D) as (E) relating to coordination with other credits.

Pub. L. 119–21, § 70512(b)(1), added subpar. (E) relating to material assistance from prohibited foreign entities.

Subsec. (b)(2)(C)(iii). Pub. L. 119–21, § 70512(e), added cl. (iii).

Subsec. (d)(1). Pub. L. 119–21, § 70512(a)(1), substituted “Subject to paragraph (4), the amount of” for “The amount of” in introductory provisions.

Subsec. (d)(3), (4). Pub. L. 119–21, § 70512(a)(2), added pars. (3) and (4) and struck out former par. (3). Prior to amendment, text of par. (3) read as follows: “For purposes of this subsection, the term ‘applicable year’ means the later of—

“(A) the calendar year in which the Secretary determines that the annual greenhouse gas emissions from the production of electricity in the United States are equal to or less than 25 percent of the annual greenhouse gas emissions from the production of electricity in the United States for calendar year 2022, or

“(B) 2032.”

Subsec. (g)(13). Pub. L. 119–21, § 70512(b)(2), added par. (13).

Subsec. (h). Pub. L. 119–21, § 70512(d), added subsec. (h).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2025 Amendment

Amendment by Pub. L. 119–21 applicable to taxable years beginning after July 4, 2025, except that amendment by section 70512(a) of Pub. L. 119–21 applicable to facilities the construction of which begins after the date which is 12 months after July 4, 2025, and amendment by section 70512(b)(1) of Pub. L. 119–21 applicable to facilities for which construction begins after Dec. 31, 2025, see section 70512(l)(1), (2), (4) of Pub. L. 119–21, set out in a note under section 45 of this title.

### Effective Date

Pub. L. 117–169, title I, § 13701(c), Aug. 16, 2022, 136 Stat. 1990, provided that: “The amendments made by this section [enacting this section and amending section 38 of this title] shall apply to facilities placed in service after December 31, 2024.”