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Transferrable tax credits (TTCs) are a powerful mechanism that developers have embraced in their project financing strategies. And for the right corporate buyer, TTCs can be an attractive opportunity to support the development of new renewable energy projects and, at the same time, realize a predictable return.
The mechanism, introduced by the Inflation Reduction Act (IRA), allows renewable energy developers who complete a qualifying project and earn a federal tax credit to then sell that tax credit. The two most common credits the transferability option applies to are:
- Investment Tax Credits (ITCs)—which are a credit based on a percentage of the cost of a project (can be generated by solar projects), and
- Production Tax Credits (PTCs)—which are a credit based on a certain amount per kilowatt-hour of electricity generated (can be generated by solar or wind projects).
TTCs have quickly become an essential tool for financing clean energy and are a financially attractive option for corporate buyers to reduce their tax liability due to the credits being sold at a discount. Despite recent market headwinds and policy uncertainty for renewables in general, the TTC market is demonstrating significant resilience and explosive growth.
Get the full TTC update
Download the Fall 2025 Global Market Insights Report for the latest in TTCs.
We’ve included some highlights and key market updates from our most recent Global Market Insights Report here:
In the first half of 2025, the TTC market experienced a massive acceleration, doubling in size compared to the same period in the prior year and surpassing $20 billion in total market value.
This robust growth occurred even amidst regulatory uncertainty from the Trump Administration through the passage of H.R.1, also known as the One Big Beautiful Bill Act (OBBBA). Fortunately, H.R. 1 preserved the tax credit transferability option, despite the accelerated phase-outs of tax credits for wind and solar projects. Tax credits for other sectors and technologies mostly remained or have even been extended, ensuring a robust market for TTCs over the next seven to ten years.
For corporate buyers, TTCs are attractive because they are traded at a discount on the dollar, and the average price of TTCs has held stable—similar to 2024 pricing. A key nuance when it comes to TTC pricing is the risk profile of the credits. Production Tax Credits (PTCs) inherently contain less risk, which leads them to trade at a slight premium to Investment Tax Credits (ITCs).
TTCs in their basic form do not enable a company to claim the use of renewable energy or reduce its scope 2 emissions, as the credits do not come with renewable energy certificates (RECs).
However, there is an opportunity to pair tax credit purchases with renewable energy in order to claim scope 2 reductions. Corporations can opt to pair a tax credit purchase with REC purchases or a power purchase agreement (PPA) from the same clean energy project. This bundling can be a way for buyers to make credible renewable energy claims while improving the projected economics of a PPA or REC purchase.
Buyers looking to purchase these creative product bundles are encouraged to work with expert advisers like 3Degrees to ensure they’re receiving both the tax and renewable advantages of TTCs.
Read the full update on TTCs in the Fall 2025 edition of our Global Market Insights Report.
