Advanced Manufacturing Production Tax Credit (Section 45X)
Internal Revenue Service
Per-unit (e.g. $0.07/W solar)
Get paid per clean energy part you make
A federal per-unit production tax credit for US manufacturers of eligible clean energy components: solar cells ($0.04/W), solar modules ($0.07/W), wind blades ($0.02/W), wind nacelles ($0.05/W), wind towers ($0.03/W), battery cells ($35/kWh), battery modules ($10/kWh), inverters ($0.0025–$0.11/W depending on type), and critical minerals (10% of production costs). No prevailing wage requirements apply. Credits phase down starting in 2030 for most components (wind components terminate after 2027). For-profit manufacturers can use direct pay for up to 5 tax years. All taxpayers can transfer (sell) credits to third-party buyers. Companies with ties to 'foreign entities of concern' (China, Russia, Iran, North Korea) face restrictions.
- Funding type
- Tax Credit
- Level
- Federal
- Amount
- Per-unit credits vary by component: solar cells $0.04/W, solar modules $0.07/W, wind blades $0.02/W, nacelles $0.05/W, towers $0.03/W, battery cells $35/kWh, battery modules $10/kWh (or $45/kWh if cellless), critical minerals 10% of costs, inverters $0.0025–$0.11/W by type. Phase-down: 75% in 2030, 50% in 2031, 25% in 2032, 0% after 2032 (critical minerals phase down one year later; wind components expire after 2027).
- Realistic amount
- A US solar module manufacturer producing 500 MW of panels per year earns $35M in credits (500M W × $0.07/W). A battery c…
- Deadline
- Ongoing — credit claimed on annual tax return for eligible components sold or used during the tax year. Wind energy components must be sold before December 31, 2027. Most other components phase down from 2030 through 2032.
- Status
- active
- States
- Nationwide
- Payment model
- tax offset
Who qualifies
- Must be a US-based manufacturer that produces eligible components within the United States
- Eligible components: photovoltaic cells and modules, photovoltaic wafers, solar-grade polysilicon, wind turbine blades/nacelles/towers/foundations, offshore wind vessels, inverters (central/utility/commercial/residential/microinverters), battery cells and modules, electrode active materials, applicable critical minerals
- Credit is earned when eligible components are sold to an unrelated party OR used by the taxpayer themselves
- No prevailing wage or apprenticeship requirements — credit applies regardless of workforce wage levels
- For-profit companies may elect direct pay (elective pay under §6417(d)(3)) for the first 5 tax years of claiming the credit
- All taxpayers may transfer (sell) the credit to unrelated third-party buyers under §6418
- Companies that are 'foreign entities of concern' (entities with ties to China, Russia, Iran, or North Korea per National Defense Authorization Act definitions) are ineligible — applicable starting 2024 for some components and phasing in by 2026
- Critical minerals must be produced from processing or refining within the US to qualify
Hard requirements
- Must be incorporated
What it covers
Eligible expenses
- Revenue derived from sale of eligible components to unrelated third parties
- Fair market value of components used by the manufacturer in their own clean energy projects
- Production costs of applicable critical minerals (10% credit rate applies to costs, not revenue)
Ineligible expenses
- Components sold to related parties (more than 50% common ownership)
- Components produced outside the United States
- Components made by or sold to foreign entities of concern
- Refurbished or recycled content not produced through eligible manufacturing processes
- Installation or project development costs (credit is on manufacturing, not project development)
How to apply
-
1
Confirm component and production eligibility
Verify each component type qualifies under §45X's specific definitions and technical requirements. Confirm production occurs in the United States. Check whether your company or any >25% foreign owners are 'foreign entities of concern' under applicable federal definitions.
~5 hrs
-
2
Track production and sales data by component
Implement systems to track units produced (watts, kWh capacity, kilograms, or sales price as applicable per component) and distinguish sales to unrelated parties from related-party transactions. The credit is earned on the sale or use, not on production alone.
~10 hrs
-
3
Register with IRS and elect direct pay or plan transfer
If using direct pay (first 5 years only for for-profits), file elective pay election by tax return due date. If transferring credits, register through the IRS pre-filing registration portal and execute transfer agreements with buyers before the return is filed. Credit transfers are one-time and irrevocable per credit tranche.
~12 hrs
-
4
Prepare Form 7207 and credit calculations
Complete IRS Form 7207 (Advanced Manufacturing Production Credit) for each component type. Calculate credit by multiplying units sold by the applicable per-unit rate. Aggregate across component types. Document foreign entity of concern compliance.
~8 hrs
-
5
File with tax return and plan for phase-down
Attach Form 7207 to federal income tax return. No basis reduction applies to §45X (unlike §48 ITC). Begin modeling the phase-down impact on financial projections — 75% of current credit value from 2030, declining to zero after 2032 for most components.
~4 hrs
Industry & certifications
NAICS codes: 335911, 335912, 333415, 327993, 212230
Direct pay for for-profits is capped at 5 tax years total — plan your transfer strategy early. The foreign entity of concern restrictions are tightening annually through 2026; document your ownership chain before claiming.
Deadline & timing
Wind energy components (blades, nacelles, towers, offshore wind foundations) terminate entirely after December 31, 2027 — no phase-down, full cliff. Solar and battery components phase to 0% credit after 2032. Critical minerals phase out one year later (0% after 2033). For-profit direct pay is available only for the first 5 tax years the manufacturer claims the credit (through December 31, 2032 at most).
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Last reviewed 2026. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.