Enter the project basics and the adders that apply. The tool returns the credit rate and dollar value, and shows how each bonus stacks on the base rate.
Project inputs
Qualified investment in the facility (the credit basis).
Facilities under 1 MW qualify for the full rate automatically, no PWA required.
Allocation based and capacity limited. Applies to facilities under 5 MW that receive an award.
Assumed capacity factor: 25%.
Estimated credit
How the rate stacks
How the rate stacks
10-year value is a gross estimate before transfer or direct pay haircuts.
ITC tends to work better for capital-intensive projects with lower capacity factors. PTC tends to work better for high-production assets with strong capacity factors and a long tax appetite. Consult your tax advisor to model which election maximizes your project's return.
Estimate for discussion in sales conversations covering Section 48E and 45Y. Confirm against project specifics and current Treasury guidance before relying on it.
Empact manages 48E and 45Y compliance end to end – from QF structuring through the full audit window.
Section 48E is the technology-neutral clean electricity investment tax credit that replaced Section 48 for facilities beginning construction on or after January 1, 2025. It provides a base credit of 6% of eligible project costs, rising to 30% for projects that meet Prevailing Wage and Apprenticeship (PWA) requirements or fall below 1 MW in capacity.
Section 45Y is the technology-neutral production tax credit that replaced Section 45 for facilities placed in service on or after January 1, 2025. Unlike Section 48E, which is claimed on project cost at placed-in-service, Section 45Y is claimed on kilowatt-hours of electricity generated and sold over a 10-year period following placed-in-service. The credit applies only to facilities with a greenhouse gas emissions rate of zero or below.
Section 48E is the investment tax credit (ITC) – claimed as a percentage of project cost at placed-in-service. Section 45Y is the production tax credit (PTC) – claimed per kilowatt-hour of electricity produced over 10 years. A taxpayer may elect one or the other for the same facility but may not claim both. ITC tends to work better for capital-intensive projects with lower capacity factors. PTC tends to work better for high-production assets with strong capacity factors and a long tax appetite.
The Section 45Y base rate is 0.3 cents per kWh, rising to 1.5 cents per kWh for facilities that meet PWA requirements or fall below 1 MW. Both rates are adjusted annually for inflation using the GDP implicit price deflator. For 2025 and 2026, the inflation-adjusted rates are 0.6 cents/kWh base and 3.0 cents/kWh with PWA. The same adders available under Section 48E – Domestic Content (10%), Energy Community (10%), and Low-Income Communities (10% or 20%) – also apply to Section 45Y, increasing the applicable rate rather than a credit percentage.
The 45Y credit value is calculated by multiplying the applicable credit rate (cents/kWh) by the facility's total electricity production over the 10-year credit period. Estimated annual generation equals project capacity (MW AC) multiplied by the assumed capacity factor multiplied by 8,760 hours per year. The result is a stream of annual credits over 10 years, not a lump sum. This calculator uses standard NREL capacity factors: 25% for solar, 35% for wind, and 85% for other technologies.
No. Facilities with a nameplate capacity below 1 MW AC qualify for the full 30% ITC rate or the full 1.5 cents/kWh PTC rate automatically, without satisfying Prevailing Wage and Apprenticeship requirements. For projects at 1 MW and above, PWA compliance is required to access the 5x multiplier on the base rate under both Section 48E and Section 45Y.
Three adders apply to both Section 48E and Section 45Y: the Domestic Content bonus (10 percentage points on the ITC rate, or a 10% increase on the PTC rate, with manufactured product thresholds increasing annually by BOC date under the OBBBA), the Energy Community bonus (same structure, for brownfield sites, fossil fuel employment communities, or coal closure tracts), and the Low-Income Communities adder (10 or 20 points/percent, allocation-based and capacity-limited, for facilities under 5 MW that receive an IRS allocation award).
The maximum rate depends on when construction begins and which adders apply. The base rate is 30% with PWA. Domestic Content adds 10 percentage points and Energy Community adds another 10, for a combined ceiling of 50% at the PWA rate before the Low-Income adder. The Low-Income Communities adder can add 10 or 20 additional points but is allocation-based and not available to all projects. Confirm applicable thresholds with your tax advisor.
FEOC restrictions under the OBBBA apply to both credits in two layers. First, for tax years beginning after July 4, 2025, no credit is allowed if the taxpayer itself is a prohibited foreign entity. Second, for facilities beginning construction after December 31, 2025, no credit is allowed if construction includes material assistance from a prohibited foreign entity. There is no cure mechanism for a FEOC violation – it voids the credit entirely for that facility. This calculator assumes FEOC clearance; projects that have not completed FEOC diligence should not treat the estimated credit value as bankable.
A Qualified Facility is the unit of production the IRS uses to measure compliance under both credits. For solar projects, each inverter and its associated modules constitutes a separate Qualified Facility. PWA compliance, Domestic Content traceability, and FEOC clearance must all be demonstrated at the Qualified Facility level, not the project level. Getting that structure wrong creates real friction when diligence teams come asking.
Under both Section 48E and Section 45Y, a PWA failure eliminates the enhanced rate entirely – dropping the ITC from 30% to 6%, or the PTC from 3.0 cents/kWh to 0.6 cents/kWh. Failures can be cured by making back-wage payments, paying interest, and remitting a $5,000 per-laborer IRS penalty within 180 days of a final IRS determination. Intentional disregard doubles the correction payment and raises the per-laborer penalty to $10,000.
Under the OBBBA, solar and wind facilities must be placed in service before December 31, 2027 to claim either credit, unless construction began before July 5, 2026, in which case a limited exception may apply. For other qualifying technologies, the phase-out begins in 2034. The OBBBA transition rules are complex and fact-specific – confirm your project's placed-in-service deadline with your tax advisor.