MEMO: Repealing Transferability of Energy Tax Credits: A Move that Would Save us $0, Kill Jobs, and Raise Energy Prices

TO: Interested Parties

FROM: Climate Power

DATE: May 12, 2025

RE: Repealing Transferability of Energy Tax Credits: A Move that Would Save us $0, Kill Jobs, and Raise Energy Prices

An under-reported feature of existing energy tax credits supported by at least 36 Republican House members is the ability to sell and buy investment, manufacturing, and production tax credits – known as transferability. 

The transferability of energy tax credits has enabled a wide range of clean energy developers and manufacturers – from small startups to established firms – to advance American clean energy with more flexible financing tools that help lower their costs for investing in American jobs and communities.  Transferability costs the government nothing – it is merely a tool for companies to exchange credits they would be eligible for anyway for a cash infusion, providing greater flexibility, lower financing costs, and even the ability to reinvest in expanding their operations more rapidly than they would otherwise be able to. 

In short: Repealing transferability would be putting needless red tape on energy producers, and would delay projects, raise energy prices, stifle innovative energy startups, and even kill jobs – and any “savings” being claimed for repealing transferability aren’t real. 

What is transferability?

Prior to 2022, companies had to have a tax liability that met or exceeded the value of any energy tax credits they were trying to claim in order to receive the full value of the credit, or engage in complex tax equity transactions with a limited number of large commercial banks. Because tax equity financing is costly, complicated, and limited, only the largest utility-scale project developers typically have had access to financing for their projects. Today, clean energy developers and manufacturers of all sizes and stages of business development can sell the value of their energy tax credits up front, lowering financing costs and putting cash in the company’s pocket immediately. Read more here.

Transferability Creates Good-Paying Jobs

Small projects and startups that don’t have sufficient tax liability to be candidates for traditional tax equity financing may rely on transferable tax credits to finance their projects. At the same time, transferability gives large companies the confidence to expand their investment footprint more quickly.  

American solar manufacturer First Solar has benefited from at least $857 million in tax credit transfer deals that have allowed the company to increase the volume of solar panels produced in Alabama and Ohio and support the creation of 30,000 new American jobs. In less than two years, Schneider Electric facilitated $1.7 billion in 18 tax credit transfer transactions since late 2023, including the development of a portfolio of Texas solar and battery projects, American solar manufacturing facility expansion, and four new battery storage projects for Kimberly-Clark. Every one of these 18 deals has created good-paying American jobs by allowing companies to take the tax benefits they would qualify for anyway and reinvest immediately in their operations. 

It is estimated that more than $500 billion in private tax transferability deals have taken place since 2022.

Transferability Helps U.S. Manufacturers Compete with China

The U.S. is the only country outside of China that is building a completely homegrown clean energy supply chain, and the transferability of the 45X advanced manufacturing tax credit is making it possible. More than one-third of clean energy tax credit transfer deals in 2024 were in manufacturing. Solar manufacturing requires high upfront costs, and experts say that being able to get cash up front via tax credit transferability immediately “support[s] job growth and keep[s] the downstream supply chain within the United States.”

If America forfeits the race on clean energy, China will pull ahead forever, and America will watch our jobs move overseas all over again. Transferability is critical to continuing the buildout of U.S. clean energy manufacturing.

Transferability Enables Cost-Saving Nuclear Energy That Republicans Claim to Support

Nuclear energy is broadly popular in the US, with support from 61 percent of all Americans and 74 percent of Republicans. In a recent letter to House Ways & Means leadership, 26 Republican House members wrote that transferability “has proven essential for monetizing electricity tax credits in the nuclear sector.” 

As energy demand skyrockets in the United States, we need more reliable, more affordable, cleaner energy in the mix to keep costs down and keep the lights on. Nuclear energy can provide clean electricity during the most expensive hours when wind and solar are unavailable.

As 12 House Republicans wrote in a new letter to Ways & Means leadership, “The transferability provisions in the ITC and PTC are key to maximizing these consumer benefits by enabling more efficient monetization of the credits, reduced financing costs, and increased

capital investment in domestic energy projects.” 

Republicans ran on a promise to slash energy costs and make life affordable. Protecting energy tax credits, including transferability, would go a long way toward fulfilling that promise.