RTC Policy Finder

Section 45 Production Tax Credit (PTC)

The Sec. 45 Production Tax Credit (PTC) was extended by the Inflation Reduction Act in 2022. This credit is equal to 0.3 cents per kilowatt hours of electricity produced from qualified energy resources, and 1.5 cents for facilities that meet prevailing wage and apprenticeship requirements. The amount will be raised by 10% if the product meets domestic content requirements and raised an additional 10% if the facility is located in an energy community. To qualify, the electricity produced must be sold to an unrelated person during that year. The Sec. 45 PTC incentivizes broad electricity sector decarbonization and encourages the deployment of renewable energy sources at industrial facilities. Eligible renewable thermal technologies include biomass, geothermal, and landfill gas. The credit applies to projects beginning construction before 2025, after which the facility may qualify for a 10-year period beginning on the date the facility was placed in service. The technology-neutral Sec. 45Y Clean Electricity Credit will replace this credit, applying to all facilities beginning construction after the end of 2024.

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