Energy Generation and Carbon Capture: Green Energy: Tax Breaks for Renewables & Carbon Capture

Section §45 - Production Tax Credit for Electricity from Renewables (pre-2025)

The Renewable Electricity Production Tax Credit (PTC) offers a federal tax credit for electricity generated by qualified renewable resources, with varying rates and up to 10 years duration, enhanced by bonuses for projects meeting specific criteria.

Section §45Y - Clean Electricity Production Tax Credit (2025 onwards)

The Section 45Y tax credit incentivizes clean electricity production, replacing the renewable energy credit, with bonuses for meeting wage, apprenticeship, domestic content, and energy community criteria.

Section §45Q - Credit for Carbon Oxide Sequestrations

The Bipartisan Budget Act of 2018 expanded tax credits for CO2 use and storage under Section 45Q of the Internal Revenue Code, aiming to boost carbon capture, utilization, and storage projects and aid decarbonization efforts in the United States.

Section §45U - Zero-Emission Nuclear Power Production Credit

The 45U tax credit supports electricity production at qualified nuclear power facilities, excluding existing plants, with eligibility for direct pay and transferability, offering a base credit of 0.3 cents/kWh and bonuses for meeting prevailing wage requirements.

Section §48 - Investment Tax Credit for Energy Property (pre-2025)

The Section 48 tax credit incentivizes investments in a range of renewable energy projects, such as fuel cell, solar, geothermal, and more, offering a credit amount of 6% of qualified investment, which increases to 30% if prevailing wage requirements are met.

Section §48E - Clean Electricity Investment tax Credit (2025 onwards)

The 48E tax credit incentivizes clean electricity generation investments with a 6% base credit of qualified investment, plus bonuses for meeting labor, domestic content, and energy community criteria.

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