April 20, 2026 · Investors · By Kite Energy
§6418 ITC Transfers: Buying Federal Tax Credits at a Discount
Transferability turned federal energy tax credits into a straightforward cash transaction. Here's how corporate buyers typically pay $0.87–$0.93 per dollar of credit — without joining a partnership.
Before transferability, monetizing a federal energy investment tax credit meant a tax equity partnership — powerful, but complex. Section 6418 changed that: project owners can now sell credits directly to corporate buyers for cash.
The mechanics
- A project like Kite's generates ITCs when placed in service.
- The credits are registered through the IRS pre-filing portal.
- A buyer with federal tax liability purchases them under a transfer agreement — typically at $0.87–$0.93 per $1.00 of credit.
- The buyer applies the full credit value against its tax bill; the discount is the return.
What about recapture risk?
ITCs carry a five-year recapture period. In transfer deals this is managed with seller indemnities and, commonly, tax credit insurance — which has become standard enough that it rarely changes the economics materially.
Who this fits
Corporations with meaningful, predictable federal tax liability that want the benefit of clean energy economics without project involvement, partnership accounting, or long holding periods. It's a purchase agreement and a wire — not a fund commitment.
Kite structures projects for maximum available federal incentives under §48 or §48E; eligibility depends on fuel source and construction timeline.
Frequently Asked Questions
Is there a minimum purchase size for transferred credits?
There's no statutory minimum, but transaction costs make most deals practical above roughly $1M in credits. Kite works with buyers across a range of sizes — the intake form on our investors page is the fastest way to start the conversation.
Can credits be carried forward if I can't use them all this year?
Purchased credits follow the general business credit rules, including carryback and carryforward treatment. Confirm specifics with your tax advisor — this article is general information, not tax advice.
Interested in Purchasing Transferred Credits?
Kite structures §48 and §48E credits for transfer. Tell us your tax capacity and we'll follow up with available volumes.
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