ITC / PTC Tax Credit Calculator
Federal clean energy tax credits are among the largest single incentives available for qualifying projects — but their value swings enormously depending on which requirements are met. This calculator illustrates the Section 48E Investment Tax Credit (ITC) and Section 45Y Production Tax Credit (PTC) structure: choose your credit type, enter your eligible project cost (ITC) or annual electricity production (PTC), and toggle whether prevailing wage and apprenticeship, domestic content, and energy community requirements are met. For the depreciation side of the tax picture, see our Depreciation (MACRS) Calculator, and for state and utility programs that stack alongside federal credits, see the Utility Incentive & Rebate Calculator.
The total eligible basis of the qualified energy property — equipment, labor, and balance of plant that qualifies for the Section 48E Investment Tax Credit.
base ITC rate (%) + domestic content bonus (%) + energy community bonus (%)
total eligible project cost ($) × (total ITC rate (%) ÷ 100)
Important eligibility update — verify before relying on these numbers. Federal clean energy tax credit law changed significantly under the 2025 One Big Beautiful Bill Act (OBBBA), which accelerated the phase-out of these credits compared to the original Inflation Reduction Act timeline. Projects generally needed to begin construction by July 4, 2026 to qualify for an extended safe harbor; projects starting after that date must be placed in service by December 31, 2027 to remain eligible at all. Eligibility rules, bonus adder stacking limits, and exact percentages are complex and continue to evolve. This calculator provides a simplified illustration of the credit structure only -- verify your specific project's current eligibility and exact credit calculation with a qualified tax professional before making any financial decisions.
Results update live as you type. For planning and field-check estimates — always verify against applicable standards and equipment ratings.
How we calculate this →Meeting prevailing wage and apprenticeship requirements is the single biggest lever in the ITC/PTC structure: it multiplies the base credit by 5x, turning a 6% Investment Tax Credit into 30%, or a 0.3 cents/kWh Production Tax Credit into 1.5 cents/kWh. On a $1 million project, that's the difference between a $60,000 credit and a $300,000 credit. Given how significantly federal clean energy tax policy has shifted in 2025-2026, confirming current eligibility requirements and deadlines with a tax professional isn't optional -- it's essential before this credit gets built into any project's financial model.
How ITC and PTC tax credits are calculated
This calculator illustrates the structure of the Section 48E Investment Tax Credit (ITC) and Section 45Y Production Tax Credit (PTC) for clean energy projects. A credit-type dropdown selects which calculation path is shown, and the inputs and outputs change accordingly.
Investment Tax Credit (ITC) path. The ITC provides a one-time credit equal to a percentage of eligible project cost, built up from a base rate plus optional bonus adders. Base ITC Rate (%) = IF prevailing wage & apprenticeship requirements met = 30, ELSE 6. Meeting these labor requirements multiplies the 6% base Section 48E credit by 5x, to 30% -- the single largest lever in the credit structure. Domestic Content Bonus (%) = IF domestic content requirement met = 10, ELSE 0, available when a project meets domestic manufacturing content thresholds. Energy Community Bonus (%) = IF energy community location = 10, ELSE 0, available when a project is located in a qualifying energy community such as a former fossil fuel site or coal-community area. Total ITC Rate (%) = Base ITC Rate + Domestic Content Bonus + Energy Community Bonus. ITC Value ($) = Total Eligible Project Cost ($) × (Total ITC Rate (%) ÷ 100). At the ITC defaults ($1,000,000 cost, prevailing wage met, no domestic content, no energy community), the base rate is 30%, the bonuses are 0 each, the total ITC rate is 30%, and the ITC value is 1,000,000 × 0.30 = $300,000.
Production Tax Credit (PTC) path. The PTC instead provides a per-kilowatt-hour credit for actual electricity generated over the first 10 years of operation. Base PTC Rate (cents/kWh) = IF prevailing wage & apprenticeship requirements met = 1.5, ELSE 0.3. As with the ITC, meeting the labor requirements multiplies the 0.3 cents/kWh base Section 45Y credit by 5x, to 1.5 cents/kWh. Annual PTC Value ($/year) = Annual Electricity Production (MWh/year) × 1,000 × (Base PTC Rate (cents/kWh) ÷ 100), converting megawatt-hours to kilowatt-hours and cents to dollars. 10-Year Total PTC Value ($) = Annual PTC Value ($/year) × 10, reflecting the 10-year credit period. At the PTC defaults (100,000 MWh/year, prevailing wage met), the base rate is 1.5 cents/kWh, the annual PTC value is 100,000 × 1,000 × 0.015 = $1,500,000/year, and the 10-year total is 1,500,000 × 10 = $15,000,000.
Two notes on the model. First, this is a simplified illustration of the credit structure only -- it omits the foreign entity sourcing restrictions, exact bonus stacking limits, recapture rules, basis reduction, and interaction with other incentives that a full credit calculation must address, and federal clean energy tax credit law changed significantly under the 2025 One Big Beautiful Bill Act (OBBBA), which accelerated the phase-out timeline compared to the original Inflation Reduction Act framework. Projects generally needed to begin construction by July 4, 2026 to qualify for an extended safe harbor; projects starting after that date must be placed in service by December 31, 2027 to remain eligible at all. Always verify current eligibility and exact credit calculation with a qualified tax professional. Second, taxpayers generally elect either the ITC or the PTC for a given project, and the better choice depends on expected capacity factor, project cost, and financing structure -- a high-capacity-factor, lower-cost project often favors the PTC, while a higher-cost project with a lower capacity factor often favors the ITC. Data sources: Section 48E Investment Tax Credit and Section 45Y Production Tax Credit law from the 2025 One Big Beautiful Bill Act (OBBBA) and Internal Revenue Code; prevailing wage and apprenticeship requirement multipliers from IRS guidance and Treasury Department clean energy tax credit regulations; domestic content and energy community bonus adder rules from IRS Section 48E and 45Y guidance; safe harbor and construction commencement deadlines from OBBBA and Treasury Department implementation guidance; ITC vs. PTC election rules and interaction with other incentives from tax and energy finance literature. Verification: with ITC defaults ($1,000,000 cost, PWA met, no domestic content, no energy community), Total ITC Rate = 30%, ITC Value = $300,000; with PTC defaults (100,000 MWh/year, PWA met), Base PTC Rate = 1.5 cents/kWh, Annual PTC Value = $1,500,000, 10-Year Total PTC Value = $15,000,000.