State of IRA Incentives 2026: The Annual Market Report
Executive Summary
- The One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, is the law this report is written around. It terminated several credits developers relied on, including Section 45L, Section 179D and Section 30C.
- Wind and solar projects under Section 48E and Section 45Y must have begun construction by July 4, 2026, or be placed in service by December 31, 2027. Energy storage and other technologies keep the longer phase-down schedule.
- Transfer under Section 6418 remains available for the credits that are still earned, so the transfer market continues.
- State, New York City and utility programs are not affected by the One Big Beautiful Bill Act.
The Transferable Credit Market: Year Three
The transferable IRA tax credit market, enabled by Section 6418 of the IRA, is entering its third year of operation in 2026. It is maturing from a frontier product into a mainstream alternative to traditional tax equity. The One Big Beautiful Bill Act left transfer in place for the credits that remain, but narrowed which projects can earn many of them.
Several structural trends are shaping the 2026 market:
Buyer Base Expansion
The buyer universe has expanded well beyond the original large bank and insurance company buyers. Corporations seeking to offset tax liability — in tech, manufacturing, retail, and healthcare — have entered as direct buyers. Family offices and high-net-worth individuals participate through aggregated fund vehicles. This deeper buyer base has supported pricing stability.
Intermediary Infrastructure Maturing
Specialized credit brokers, lawyers, and insurers have built infrastructure around transferable credits, including standard transaction documentation such as purchase agreements, tax opinion formats, and insurance products.
Smaller Deal Sizes Becoming Viable
Aggregation platforms, where multiple smaller projects pool their credits for sale to a single buyer, have lowered the minimum practical deal size. This opens the market to smaller developers and distributed energy projects.
ITC Recapture Insurance as Standard Practice
Buyers increasingly require recapture insurance, which is now a standard product. The premium comes out of the developer's net proceeds.
Policy Landscape After the One Big Beautiful Bill Act
An earlier version of this section treated an IRA rollback as a future risk and rated Section 45L and Section 179D among the safest provisions. The rollback had already happened. The One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, ended or narrowed several IRA credits. Here is where the main programs stand as of September 10, 2026:
Section 48E and Section 45Y: wind and solar
Projects must have begun construction by July 4, 2026, or be placed in service by December 31, 2027. Treasury Notice 2025-42 tightened the beginning-of-construction rules. Foreign-entity-of-concern restrictions now apply.
Section 48E and Section 45Y: energy storage and other technologies
Keep the longer phase-down schedule, subject to the new foreign-entity-of-concern restrictions.
Legacy Section 48 ITC and Section 45 PTC
Cover only projects that began construction before 2025. Newer projects use Section 48E and Section 45Y.
Section 45V Clean Hydrogen
Only facilities that begin construction before January 1, 2028 qualify.
Section 45L New Energy Efficient Home
Terminated for homes acquired after June 30, 2026.
Section 179D Commercial Building Deduction
Terminated for property whose construction begins after June 30, 2026. Projects that began construction on or before that date can still claim it in the year they are placed in service.
Section 30C EV Charging Property
Terminated for property placed in service after June 30, 2026.
Section 25C and Section 25D Residential Credits
Terminated after December 31, 2025.
Section 30D, Section 25E and Section 45W Clean Vehicles
Terminated for vehicles acquired after September 30, 2025.
State, New York City and utility programs
The One Big Beautiful Bill Act did not change them. Confirm current terms with each program administrator.
Sources: IRS Fact Sheet FS-2025-05 (Sections 25C, 25D, 25E, 30C, 30D, 45L, 45W and 179D) and IRS Notice 2025-42 (beginning of construction for wind and solar).
Frequently Asked Questions
What did the One Big Beautiful Bill Act change?
The One Big Beautiful Bill Act (P.L. 119-21), signed July 4, 2025, terminated several federal credits: Section 25C and Section 25D after December 31, 2025; Section 30D, Section 25E and Section 45W for vehicles acquired after September 30, 2025; Section 45L for homes acquired after June 30, 2026; Section 179D for property whose construction begins after June 30, 2026; and Section 30C for property placed in service after June 30, 2026. Wind and solar projects under Section 48E and Section 45Y must have begun construction by July 4, 2026, or be placed in service by December 31, 2027, and foreign-entity-of-concern restrictions now apply.
Which federal credits still apply to new projects?
New clean electricity and energy storage projects use Section 48E and Section 45Y. The legacy Section 48 and Section 45 credits cover only projects that began construction before 2025. Wind and solar face the construction and placed-in-service deadlines above, while energy storage and other technologies keep the longer phase-down schedule. The Section 45V clean hydrogen credit is limited to facilities that begin construction before January 1, 2028.
Can federal credits still be transferred?
Yes, for credits that are still earned. Transfer under Section 6418 is available for credits under Sections 45, 45Q, 45U, 45V, 45X, 45Y, 45Z, 48, 48C and 48E, and under Section 30C for property placed in service by June 30, 2026. It is not available for the Section 179D deduction or the Section 45L credit.
Are state, New York City and utility incentives affected?
No. The One Big Beautiful Bill Act changed federal tax law. State, New York City and utility programs, such as those run by NYSERDA and Con Edison, are not affected by it. They have their own rules and deadlines, so confirm current terms with the program administrator.
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