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§48E vs Legacy §48: What Is Different for a Credit Buyer
Two investment credits are in the market. The legacy §48 energy credit applies to energy property whose construction began before 2025. The §48E clean electricity investment credit is the technology-neutral replacement for facilities and storage placed in service after 2024 (IRS). Buyers see both in 2026, priced differently.
| Legacy §48 | §48E | |
|---|---|---|
| Which projects | Construction began before January 1, 2025 (§48) | Qualified facilities and storage placed in service after December 31, 2024 (IRS) |
| Credit rates | 6% base, 30% with prevailing wage and apprenticeship, plus bonuses | 6% base, 30% with prevailing wage and apprenticeship, plus bonuses (IRS) |
| Foreign-entity rules | Exempt per Crux (projects began before 2025) | Material assistance rule for construction beginning after 2025; restrictions on prohibited foreign entities (§48E; Notice 2026-15) |
| Recapture | Five years under §50 | Five years under §50, plus new foreign-entity recapture for later tax years (Crux) |
| Pricing (third-party) | Crux: premium of $0.015 per dollar over foreign-entity-exposed ITCs, H1 2026 | Crux: $0.913 market average for 2026 ITCs; Cenet: discount to legacy |
| Supply | Finite: only projects that began construction before 2025 | Open-ended: new facilities and storage; broader pool |
| Same facility? | A facility claims one credit or the other, not both. | |
What this means for a buyer
- If you are offered a legacy credit, it avoids the foreign-entity rules, which can justify a higher price. It is not risk-free: recapture, basis and prevailing wage risk still apply, and the pool is shrinking as projects are placed in service.
- If you are offered a §48E credit, ask for foreign-entity support. Crux says that issue dominated pricing in H1 2026.
- Watch pooled deals. Crux notes sellers sometimes combine foreign-entity-exposed credits with legacy credits in one transaction. Ask what is in the pool, who is liable for each, and how a failure on one credit is priced.
Because a buyer can use the credit only once and in one year, pick the credit that matches your timing and risk tolerance. See the §48E buyer guide, the pricing guide, and the ITC overview.
Frequently asked questions
Can a project claim both §48 and §48E?
No. A facility claims one or the other. Legacy §48 covers energy property whose construction began before 2025; §48E covers facilities and storage placed in service after 2024 under the technology-neutral regime.
Why do legacy credits cost more?
Crux says legacy §48 credits are exempt from the new prohibited foreign entity rules, which makes them less risky, and they commanded a $0.015 premium per dollar of credit over foreign-entity-exposed ITCs in H1 2026.
Do legacy credits have recapture?
Yes. §48 property is investment credit property subject to the five-year recapture rule in §50, the same as §48E.
Will legacy credits run out?
The pool is limited to projects that began construction before 2025 and still need to be placed in service, so supply is finite. A buyer who needs one should ask early.
- 26 U.S.C. §48, Energy credit (Cornell LII)
- 26 U.S.C. §48E, Clean electricity investment credit (Cornell LII)
- IRS: Clean Electricity Investment Credit (§48E)
- 26 U.S.C. §50, Other special rules, including recapture (Cornell LII)
- Crux: 2026 mid-year market intelligence report, 5 takeaways (Aug. 20, 2026), third-party market data
- Cenet Capital: Tax credit transfer market report, Q4 2026 (Oct. 4, 2026), third-party market data
- IRS Notice 2026-15, interim guidance on material assistance from prohibited foreign entities