Selling Commercial Solar Tax Credits for Cash (IRC Section 6418 Transferability Guide)
What if your farm, manufacturing shop, or real estate LLC qualifies for a $150,000 Commercial Solar Tax Credit (Section 48E), but your business didn't owe $150,000 in federal income taxes this year? Under IRC Section 6418, you can legally SELL your solar tax credit to another profitable corporation for cash—and the cash you receive is 100% tax-free!
📋 Official IRS Line-by-Line & Statutory Breakdown
After your commercial solar or battery system is placed in service (and before filing your business tax return), register the facility on the IRS Energy Credits Online portal to receive a unique Registration Number.
Partner with a profitable C-Corp buyer (or tax-credit transfer marketplace like Crux, Basis Climate, or Reunion) who pays you $0.90 to $0.94 per $1.00 of tax credit via wire transfer.
By statute, the cash consideration paid to your business for selling the tax credit is NOT included in your gross taxable income!
🚨 IRS Compliance & Audit Red Flags
- ⚠️Note: IRC Section 6418 Transferability applies ONLY to commercial/business tax credits (like Section 48E Clean Electricity ITC and Section 30C EV Chargers). Individual homeowners cannot sell a residential Section 25D (Form 5695) credit—homeowners use Carryforward instead.
- ⚠️A credit can only be transferred ONCE (the buyer cannot re-sell the credit to a third party).
Frequently Asked Questions: Selling Solar Tax Credits (IRC Sec 6418)
Can a farm combine a 50% USDA REAP Grant with selling their 30% Section 48E Tax Credit under Section 6418?
Yes! An agricultural producer or rural small business can receive the 50% USDA REAP cash grant AND transfer (sell) their 30% Section 48E Investment Tax Credit for cash under IRC Section 6418—turning 80% of the solar project cost into immediate liquid cash!