IRA Section 48 ITC & Section 6418 Transferability

Renewable Energy Project Economics Calculator

Model ITC tax credits, EPC costs, and 5-year financial returns for solar, battery storage, and other clean energy projects.

For informational purposes only. Not tax, legal, or financial advice.

Project Overview

Project Name

Project Type *

System Size (kW DC) *

Battery Capacity (kWh) *

kWh

State

Estimated COD

Applicable Credit Code

IRC §48 / §48E — Investment Tax Credit (ITC) | Transfer: IRC §6418

COD year note

2025: §48E applies (clean electricity ITC)

Project Costs (EPC)

Per-unit inputs × system size shown at right

Equipment

Solar Modules ($/W DC) $700,000

Inverters ($/W DC) $200,000

Racking / Mounting ($/W DC) $240,000

Battery / BESS ($/kWh) $140,000

Transformer / Switchgear ($)

BOS / Wiring / Electrical ($/W DC) $360,000

Installation & Soft Costs

Installation Labor ($/W DC) $500,000

Engineering & Design ($)

Permitting & Interconnection ($)

Development / Soft Costs ($)

PWA Compliance Report ($) Required >1 MW

Contingency (%)

Total EPC Cost (before ITC) —

ITC Configuration (IRC §48 / §48E)

Prevailing Wage & Apprenticeship (PWA) Compliant

Projects >1 MW must meet PWA requirements to qualify for the 30% base rate. Without compliance: only 6% base rate.

Base ITC

30%

Bonus Adders

Domestic Content Bonus

≥40% of manufactured products (by cost) produced in the U.S. Threshold rises to 45% for projects beginning construction after 2026.

+10%

Energy Community Bonus

Located in a brownfield site, an area with significant fossil fuel employment, or near a closed coal mine/plant. Includes many rural and industrial communities.

+10%

Low-Income Community Bonus (annual DOE capacity allocation required)

Not applicable Category 1 — Located in a low-income community (26 USC §45D) or on Indian land +10% Category 2 — Qualified low-income residential building project or qualified low-income economic benefit project +20%

Total ITC Rate

30%

ITC Amount

—

Net Project Cost

—

Monetize via IRC §6418 Credit Transfer

Sell the ITC to a third-party tax equity buyer — no partnership required. Buyer pays cash at closing; proceeds reduce your equity requirement.

Revenue Assumptions

Capacity Factor (%)

C&I solar: 15–22% | Wind: 25–45% | Geo: 80–95%

Annual Energy Production (kWh)

= 18.0% CF for 2,000 kW system

PPA / Offtake Rate ($/kWh) *

C&I PPA: $0.07–$0.12/kWh

Annual Escalation Rate (%)

REC Revenue ($/MWh) optional

Varies widely by state and market

Annual Operating Expenses

Year 1 values · 2% annual inflation applied

O&M ($/W DC / year)

Typical: $0.01–$0.02/W/yr

Insurance ($/year)

Property Tax ($/year)

Land / Site Lease ($/year)

Asset Management ($/year)

Financing

Include Debt Financing

Model a term loan to reduce your equity requirement. Debt service flows through the 5-year cash flow table.

Discount Rate for NPV (%)

Project Summary

Sample C&I Solar + Storage Project

Type Solar PV + Battery

Size 2,000 kW DC

EPC Cost —

ITC Rate 30%

ITC Amount —

Net Cost —

ITC Recapture Risk (IRC §50)

The ITC is subject to recapture if the project is disposed of or ceases qualified use within 5 years. The credit vests at 20% per year.

Year 1: 100% at risk Year 5: 20% at risk

Fully vested after Year 5

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Project Economics Results

Calculated: —

Total EPC Cost

—

—/W DC

ITC Benefit

—

@ 30% ITC

Net Project Cost

—

after ITC

Equity Required

—

cash investment

Simple Payback

—

years

5-Year IRR

—

on equity

5-Year NPV

—

@ 8% discount rate

Annual Production

—

kWh / year

5-Year Cash Flow Analysis

ITC clawback vesting period (IRC §50) · Credit vests 20% per year over 5 years · IRR & NPV calculated on equity cash flows

Year	Gross Revenue	OpEx	Debt Service	ITC / §6418	Net Cash Flow	Cumulative	Clawback Risk

Cost Breakdown

Tax Credit Summary

Revenue & OpEx Summary (Year 1)

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This calculator provides high-level estimates for educational purposes only. Results are not tax, legal, or financial advice. Consult a qualified tax attorney, CPA, or financial advisor for project-specific analysis. ITC rates and adder availability are subject to IRS guidance and annual capacity limitations.