Debrief on Clean Energy Tax Credits

As Congress looks to address the trillions of dollars in expiring tax provisions from the 2017 Tax Cuts and Jobs Act this year, interest in the energy tax provisions from the Inflation Reduction Act has risen. The Bipartisan Policy Center has written extensively on this topic and the effects that a tax package can have on American energy, including how to keep foreign adversaries from accessing energy credits and how direct Pay and transferability can make the monetization of these credits more efficient.

Energy tax credits are advancing bipartisan objectives, including lowering consumer costs, strengthening energy supply chains, increasing domestic energy production, enhancing U.S. global competitiveness, and reducing carbon emissions. As the country grapples with increasing demand for energy and global competition to develop the latest and most innovative energy technologies, these tax credits have and will continue to help expand the nation’s ability to meet its energy needs.

This issue brief outlines the energy tax credit provisions—signed into law in 2022—and includes information on which credits quality for direct pay or transferability, as well as which provisions are associated with bipartisan legislation, noted with subscripts.