26 U.S.C. § 48: Energy credit

For purposes of section 46, except as provided in paragraphs (1)(B), (2)(B), and (3)(B) of subsection (c), the energy credit for any taxable year is the energy percentage of the basis of each energy property placed in service during such taxable year. qualified fuel cell property, energy property described in clause (i) or (iii) of paragraph (3)(A) but only with respect to property the construction of which begins before January 1, 2025 , energy property described in paragraph (3)(A)(ii), qualified small wind energy property, waste energy recovery property, energy storage technology, qualified biogas property, microgrid controllers, and energy property described in clauses (v) and (vii) of paragraph (3)(A), and in the case of any energy property to which clause (i) does not apply, 0 percent. The energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures. For purposes of energy property described in subparagraph (A)(ii), the energy percentage applicable to such property pursuant to such subparagraph shall not be increased or otherwise adjusted by any provision of this section. equipment which uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat, excepting property used to generate energy for the purposes of heating a swimming pool, equipment which uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, or electrochromic glass which uses electricity to change its light transmittance properties in order to heat or cool a structure, but only with respect to property the construction of which begins before January 1, 2025 , equipment used to produce, distribute, or use energy derived from a geothermal deposit (within the meaning of section 613(e)(2)), but only, in the case of electricity generated by geothermal power, up to (but not including) the electrical transmission stage, qualified fuel cell property or qualified microturbine property, combined heat and power system property, qualified small wind energy property, equipment which uses the ground or ground water as a thermal energy source to heat a structure or as a thermal energy sink to cool a structure, but only with respect to property the construction of which begins before January 1, 2035 , waste energy recovery property, energy storage technology, qualified biogas property, or microgrid controllers, the construction, reconstruction, or erection of which is completed by the taxpayer, or which is acquired by the taxpayer if the original use of such property commences with the taxpayer, with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and have been prescribed by the Secretary by regulations (after consultation with the Secretary of Energy), and are in effect at the time of the acquisition of the property. Rules similar to the rule under section 45(b)(3) shall apply for purposes of this section. such property shall be treated as energy property for purposes of this section, and the energy percentage with respect to such property shall be 6 percent. No credit shall be allowed under section 45 for any taxable year with respect to any qualified investment credit facility. which is a qualified facility (within the meaning of section 45) described in paragraph (1), (2), (3), (4), (6), (7), (9), or (11) of section 45(d), which is placed in service after 2008 and the construction of which begins before January 1, 2025 , and no credit has been allowed under section 45, and the taxpayer makes an irrevocable election to have this paragraph apply. tangible personal property, or other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility, with respect to which depreciation (or amortization in lieu of depreciation) is allowable, which is constructed, reconstructed, erected, or acquired by the taxpayer, and the original use of which commences with the taxpayer. in the case of any facility the construction of which begins after December 31, 2016 , and before January 1, 2018 , 20 percent, in the case of any facility the construction of which begins after December 31, 2017 , and before January 1, 2019 , 40 percent, in the case of any facility the construction of which begins after December 31, 2018 , and before January 1, 2020 , 60 percent, and in the case of any facility the construction of which begins after December 31, 2019 , and before January 1, 2022 , 40 percent. In the case of any qualified offshore wind facility, subparagraph (E) shall not apply. For purposes of this subparagraph, the term “qualified offshore wind facility” means a qualified facility (within the meaning of section 45) described in paragraph (1) of section 45(d) (determined without regard to any date by which the construction of the facility is required to begin) which is located in the inland navigable waters of the United States or in the coastal waters of the United States. In the case of any qualified fuel cell property, qualified small wind property, or energy property described in clause (i) or clause (ii) of paragraph (3)(A) the construction of which begins after December 31, 2019 , and which is placed in service before January 1, 2022 , the energy percentage determined under paragraph (2) shall be equal to 26 percent. in the case of any property the construction of which begins before January 1, 2033 , and which is placed in service after December 31, 2021 , 6 percent, in the case of any property the construction of which begins after December 31, 2032 , and before January 1, 2034 , 5.2 percent, and in the case of any property the construction of which begins after December 31, 2033 , and before January 1, 2035 , 4.4 percent. For purposes of determining the credit under subsection (a), energy property shall include amounts paid or incurred by the taxpayer for qualified interconnection property in connection with the installation of energy property (as defined in paragraph (3)) which has a maximum net output of not greater than 5 megawatts (as measured in alternating current), to provide for the transmission or distribution of the electricity produced or stored by such property, and which are properly chargeable to the capital account of the taxpayer. which is part of an addition, modification, or upgrade to a transmission or distribution system which is required at or beyond the point at which the energy project interconnects to such transmission or distribution system in order to accommodate such interconnection, which is constructed, reconstructed, or erected by the taxpayer, or for which the cost with respect to the construction, reconstruction, or erection of such property is paid or incurred by such taxpayer, and the original use of which, pursuant to an interconnection agreement, commences with a utility. The term “interconnection agreement” means an agreement with a utility for the purposes of interconnecting the energy property owned by such taxpayer to the transmission or distribution system of such utility. For purposes of this paragraph, the term “utility” means the owner or operator of an electrical transmission or distribution system which is subject to the regulatory authority of a State or political subdivision thereof, any agency or instrumentality of the United States, a public service or public utility commission or other similar body of any State or political subdivision thereof, or the governing or ratemaking body of an electric cooperative. In the case of expenses paid or incurred for interconnection property, amounts otherwise chargeable to capital account with respect to such expenses shall be reduced under rules similar to the rules of section 50(c). In the case of any energy project which satisfies the requirements of subparagraph (B), the amount of the credit determined under this subsection (determined after the application of paragraphs (1) through (8) and paragraph (15) and without regard to this clause) shall be equal to such amount multiplied by 5. For purposes of this subsection, the term “energy project” means a project consisting of one or more energy properties that are part of a single project. A project with a maximum net output of less than 1 megawatt of electrical (as measured in alternating current) or thermal energy. A project the construction of which begins before the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (10)(A) and (11). A project which satisfies the requirements of paragraphs (10)(A) and (11). the construction of such energy project, and for the 5-year period beginning on the date such project is originally placed in service, the alteration or repair of such project, Rules similar to the rules of section 45(b)(7)(B) shall apply. The Secretary shall, by regulations or other guidance, provide for recapturing the benefit of any increase in the credit allowed under this subsection by reason of this paragraph with respect to any project which does not satisfy the requirements under subparagraph (A) (after application of subparagraph (B)) for the period described in clause (ii) of subparagraph (A) (but which does not cease to be investment credit property within the meaning of section 50(a)). The period and percentage of such recapture shall be determined under rules similar to the rules of section 50(a). Rules similar to the rules of section 45(b)(8) shall apply. In the case of any energy project which satisfies the requirement under subparagraph (B), for purposes of applying paragraph (2) with respect to such property, the energy percentage shall be increased by the applicable credit rate increase. Rules similar to the rules of section 45(b)(9)(B) shall apply. in the case of an energy project which does not satisfy the requirements of paragraph (9)(B), 2 percentage points, and in the case of an energy project which satisfies the requirements of paragraph (9)(B), 10 percentage points. In the case of a taxpayer making an election under section 6417 with respect to a credit under this section, rules similar to the rules of section 45(b)(10) shall apply. In the case of any energy project that is placed in service within an energy community (as defined in section 45(b)(11)(B), as applied by substituting “energy project” for “qualified facility” each place it appears), for purposes of applying paragraph (2) with respect to energy property which is part of such project, the energy percentage shall be increased by the applicable credit rate increase. in the case of any energy project which does not satisfy the requirements of paragraph (9)(B), 2 percentage points, and in the case of any energy project which satisfies the requirements of paragraph (9)(B), 10 percentage points. such property shall be treated as energy property for purposes of this section, and in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in a subparagraph (A) of section 45V(b)(2), 1.2 percent, in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in a subparagraph (B) of such section, 1.5 percent, in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in a subparagraph (C) of such section, 2 percent, and in the case of a facility which is designed and reasonably expected to produce qualified clean hydrogen which is described in subparagraph (D) of such section, 6 percent. No credit shall be allowed under section 45V or section 45Q for any taxable year with respect to any specified clean hydrogen production facility or any carbon capture equipment included at such facility. which is placed in service after December 31, 2022 , no credit has been allowed under section 45V or 45Q, and the taxpayer makes an irrevocable election to have this paragraph apply, and for which an unrelated third party has verified (in such form or manner as the Secretary may prescribe) that such facility produces hydrogen through a process which results in lifecycle greenhouse gas emissions which are consistent with the hydrogen that such facility was designed and expected to produce under subparagraph (A)(ii). For purposes of this paragraph, the term “qualified clean hydrogen” has the meaning given such term by section 45V(c)(2). The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this section, including regulations or other guidance which recaptures so much of any credit allowed under this section as exceeds the amount of the credit which would have been allowed if the expected production were consistent with the actual verified production (or all of the credit so allowed in the absence of such verification). The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection. Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a). has a nameplate capacity of at least 0.5 kilowatt (1 kilowatt in the case of a fuel cell power plant with a linear generator assembly) of electricity using an electrochemical or electromechanical process, and has an electricity-only generation efficiency greater than 30 percent. In the case of qualified fuel cell property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $1,500 for each 0.5 kilowatt of capacity of such property. The term “fuel cell power plant” means an integrated system comprised of a fuel cell stack assembly, or linear generator assembly, and associated balance of plant components which converts a fuel into electricity using electrochemical or electromechanical means. The term “linear generator assembly” does not include any assembly which contains rotating parts. The term “qualified fuel cell property” shall not include any property the construction of which does not begin before January 1, 2025 . has a nameplate capacity of less than 2,000 kilowatts, and has an electricity-only generation efficiency of not less than 26 percent at International Standard Organization conditions. In the case of qualified microturbine property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $200 for each kilowatt of capacity of such property. The term “stationary microturbine power plant” means an integrated system comprised of a gas turbine engine, a combustor, a recuperator or regenerator, a generator or alternator, and associated balance of plant components which converts a fuel into electricity and thermal energy. Such term also includes all secondary components located between the existing infrastructure for fuel delivery and the existing infrastructure for power distribution, including equipment and controls for meeting relevant power standards, such as voltage, frequency, and power factors. The term “qualified microturbine property” shall not include any property the construction of which does not begin before January 1, 2025 . which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications), at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof), the energy efficiency percentage of which exceeds 60 percent, and the construction of which begins before January 1, 2025 . In the case of combined heat and power system property with an electrical capacity in excess of the applicable capacity placed in service during the taxable year, the credit under subsection (a)(1) (determined without regard to this paragraph) for such year shall be equal to the amount which bears the same ratio to such credit as the applicable capacity bears to the capacity of such property. For purposes of clause (i), the term “applicable capacity” means 15 megawatts or a mechanical energy capacity of more than 20,000 horsepower or an equivalent combination of electrical and mechanical energy capacities. The term “combined heat and power system property” shall not include any property comprising a system if such system has a capacity in excess of 50 megawatts or a mechanical energy capacity in excess of 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities. the numerator of which is the total useful electrical, thermal, and mechanical power produced by the system at normal operating rates, and expected to be consumed in its normal application, and the denominator of which is the lower heating value of the fuel sources for the system. The energy efficiency percentage and the percentages under subparagraph (A)(ii) shall be determined on a Btu basis. The term “combined heat and power system property” does not include property used to transport the energy source to the facility or to distribute energy produced by the facility. subparagraph (A)(iii) shall not apply, but the amount of credit determined under subsection (a) with respect to such system shall not exceed the amount which bears the same ratio to such amount of credit (determined without regard to this subparagraph) as the energy efficiency percentage of such system bears to 60 percent. The term “qualified small wind energy property” means property which uses a qualifying small wind turbine to generate electricity. The term “qualifying small wind turbine” means a wind turbine which has a nameplate capacity of not more than 100 kilowatts. The term “qualified small wind energy property” shall not include any property the construction of which does not begin before January 1, 2025 . The term “waste energy recovery property” means property that generates electricity solely from heat from buildings or equipment if the primary purpose of such building or equipment is not the generation of electricity. The term “waste energy recovery property” shall not include any property which has a capacity in excess of 50 megawatts. Any waste energy recovery property (determined without regard to this subparagraph) which is part of a system which is a combined heat and power system property shall not be treated as waste energy recovery property for purposes of this section unless the taxpayer elects to not treat such system as a combined heat and power system property for purposes of this section. The term “waste energy recovery property” shall not include any property the construction of which does not begin before January 1, 2025 . property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity) which receives, stores, and delivers energy for conversion to electricity (or, in the case of hydrogen, which stores energy), and has a nameplate capacity of not less than 5 kilowatt hours, and thermal energy storage property. was placed in service before the date of enactment of this section 1 and would be described in subparagraph (A)(i), except that such property has a capacity of less than 5 kilowatt hours and is modified in a manner that such property (after such modification) has a nameplate capacity of not less than 5 kilowatt hours, or 1 See References in Text note below. is described in subparagraph (A)(i) and is modified in a manner that such property (after such modification) has an increase in nameplate capacity of not less than 5 kilowatt hours, is directly connected to a heating, ventilation, or air conditioning system, removes heat from, or adds heat to, a storage medium for subsequent use, and provides energy for the heating or cooling of the interior of a residential or commercial building. a swimming pool, combined heat and power system property, or a building or its structural components. The term “energy storage technology” shall not include any property the construction of which begins after December 31, 2024 . consists of not less than 52 percent methane by volume, or is concentrated by such system into a gas which consists of not less than 52 percent methane, and captures such gas for sale or productive use, and not for disposal via combustion. The term “qualified biogas property” includes any property which is part of such system which cleans or conditions such gas. The term “qualified biogas property” shall not include any property the construction of which begins after December 31, 2024 . part of a qualified microgrid, and designed and used to monitor and control the energy resources and loads on such microgrid. includes equipment which is capable of generating not less than 4 kilowatts and not greater than 20 megawatts of electricity, in connection with the electrical grid and as a single controllable entity with respect to such grid, and independently (and disconnected) from such grid, and is not part of a bulk-power system (as defined in section 215 of the Federal Power Act ( 16 U.S.C. 824 o )). The term “microgrid controller” shall not include any property the construction of which begins after December 31, 2024 . No credit shall be determined under this section or section 45 with respect to such property for the taxable year in which such grant is made or any subsequent taxable year. the tax imposed under subtitle A on the taxpayer for the taxable year in which such grant is made shall be increased by so much of such credit as was allowed under section 38, the general business carryforwards under section 39 shall be adjusted so as to recapture the portion of such credit which was not so allowed, and the amount of such grant shall be determined without regard to any reduction in the basis of such property by reason of such credit. shall not be includible in the gross income or alternative minimum taxable income of the taxpayer, but shall be taken into account in determining the basis of the property to which such grant relates, except that the basis of such property shall be reduced under section 50(c) in the same manner as a credit allowed under subsection (a). in the case of a facility described in subclause (I) of paragraph (2)(A)(iii) and not described in subclause (II) of such paragraph, 10 percentage points, and in the case of a facility described in subclause (II) of paragraph (2)(A)(iii), 20 percentage points, and the environmental justice solar and wind capacity limitation allocated to such facility, bears to the total megawatt nameplate capacity of such facility, as measured in direct current. which generates electricity solely from property described in section 45(d)(1) or in clause (i) or (vi) of subsection (a)(3)(A), which has a maximum net output of less than 5 megawatts (as measured in alternating current), and is located in a low-income community (as defined in section 45D(e)) or on Indian land (as defined in section 2601(2) of the Energy Policy Act of 1992 ( 25 U.S.C. 3501(2) )), or is part of a qualified low-income residential building project or a qualified low-income economic benefit project. such facility is installed on a residential rental building which participates in a covered housing program (as defined in section 41411(a) of the Violence Against Women Act of 1994 ( 34 U.S.C. 12491(a)(3) ), 2 a housing assistance program administered by the Department of Agriculture under title V of the Housing Act of 1949, a housing program administered by a tribally designated housing entity (as defined in section 4(22) of the Native American Housing Assistance and Self-Determination Act of 1996 ( 2 So in original. Another closing parenthesis probably should precede the comma. 25 U.S.C. 4103(22) )) or such other affordable housing programs as the Secretary may provide, and the financial benefits of the electricity produced by such facility are allocated equitably among the occupants of the dwelling units of such building. less than 200 percent of the poverty line (as defined in section 36B(d)(3)(A)) applicable to a family of the size involved, or less than 80 percent of area median gross income (as determined under section 142(d)(2)(B)). For purposes of subparagraphs (B) and (C), electricity acquired at a below-market rate shall not fail to be taken into account as a financial benefit. is part of a facility described in section 45(d)(1) for which an election was made under subsection (a)(5), or is described in clause (i) or (vi) of subsection (a)(3)(A), Not later than 180 days after the date of enactment of this subsection, the Secretary shall establish a program to allocate amounts of environmental justice solar and wind capacity limitation to qualified solar and wind facilities. In establishing such program and to carry out the purposes of this subsection, the Secretary shall provide procedures to allow for an efficient allocation process, including, when determined appropriate, consideration of multiple projects in a single application if such projects will be placed in service by a single taxpayer. The amount of environmental justice solar and wind capacity limitation allocated by the Secretary under subparagraph (A) during any calendar year shall not exceed the annual capacity limitation with respect to such year. For purposes of this paragraph, the term “annual capacity limitation” means 1.8 gigawatts of direct current capacity for each of calendar years 2023 and 2024, and zero thereafter. If the annual capacity limitation for any calendar year exceeds the aggregate amount allocated for such year under this paragraph, such limitation for the succeeding calendar year shall be increased by the amount of such excess. No amount may be carried under the preceding sentence to any calendar year after 2024 except as provided in section 48E(h)(4)(D)(ii). Paragraph (1) shall not apply with respect to any property which is placed in service after the date that is 4 years after the date of the allocation with respect to the facility of which such property is a part. Any amount of environmental justice solar and wind capacity limitation which expires under clause (i) during any calendar year shall be taken into account as an excess described in subparagraph (D) (or as an increase in such excess) for such calendar year, subject to the limitation imposed by the last sentence of such subparagraph. The Secretary shall, by regulations or other guidance, provide for recapturing the benefit of any increase in the credit allowed under subsection (a) by reason of this subsection with respect to any property which ceases to be property eligible for such increase (but which does not cease to be investment credit property within the meaning of section 50(a)). The period and percentage of such recapture shall be determined under rules similar to the rules of section 50(a). To the extent provided by the Secretary, such recapture may not apply with respect to any property if, within 12 months after the date the taxpayer becomes aware (or reasonably should have become aware) of such property ceasing to be property eligible for such increase, the eligibility of such property for such increase is restored. The preceding sentence shall not apply more than once with respect to any facility. Except as provided in paragraphs (2), (3), (4), and (5), the amendments made by this section [amending this section and sections 48E, 50, 1371, and 6418 of this title] shall apply to taxable years beginning after the date of enactment of this Act [ July 4, 2025 ]. The amendment made by subsection (d) [amending section 48E of this title ] shall apply on or after June 16, 2025 . The amendments made by subsection (e) [amending this section] shall apply to property the construction of which begins on or after June 16, 2025 . The amendments made by subsection (f) [amending section 48E of this title ] shall apply to property the construction of which begins after December 31, 2025 . The amendments made by subsection (a) [amending section 48E of this title ] shall apply to facilities the construction of which begins after the date which is 12 months after the date of enactment of this Act.” Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply to periods after December 31, 2016 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]). The amendment made by subsection (e) [amending this section] shall apply to property placed in service after December 31, 2016 . The amendments made by subsection (b) [amending this section] shall take effect on the date of the enactment of this Act [ Feb. 9, 2018 ].” Except as otherwise provided in this subsection, the amendments made by this section [amending this section and section 38 of this title ] shall take effect on the date of the enactment of this Act [ Oct. 3, 2008 ]. The amendments made by subsection (b) [amending section 38 of this title ] shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits. The amendments made by subsections (c) and (d) [amending this section] shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990 [ Nov. 5, 1990 ]). The amendments made by subsection (e) [amending this section] shall apply to periods after February 13, 2008 , in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).” The amendments made by this part [part I (§§ 11–18) of subtitle A of title I of div. A of Pub. L. 98–369 , amending this section and sections 41, 46, 57, 128, 168, 179, 265, 415, 854, 857, and 911 of this title, enacting provisions set out as a note under section 168 of this title , and amending provisions set out as notes under sections 128 and 168 of this title] shall apply to taxable years ending after December 31, 1983 . such plan was favorably approved on September 23, 1983 , by employees, and not later than January 11, 1984 , the employer of such employees was 100 percent owned by such plan.” Except as provided in paragraph (2), the amendments made by this section [amending this section and section 46 of this title ] shall apply to periods after December 31, 1979 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]. The amendments made by subsection (d)(1) [amending this section] shall apply to periods after September 30, 1978 , under rules similar to the rules of section 48(m) of such Code.” Except as provided in subparagraph (B), the amendment made by paragraph (1) [amending this section] shall apply to periods after December 31, 1982 , under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].” The amendments made by this subsection [amending this section and section 167 of this title ] shall apply to property which is placed in service after September 30, 1978 . The amendments made by this subsection [amending this section and section 167 of this title ] shall not apply to property which is constructed, reconstructed, erected, or acquired pursuant to a contract which, on October 1, 1978 , and at all times thereafter, was binding on the taxpayer.” The amendments made by subsections (a) and (b) [amending this section and section 47 of this title ] shall apply to taxable years beginning after December 31, 1974 . At the election of the taxpayer, made within 1 year after the date of the enactment of this Act [ Oct. 4, 1976 ] in such manner as the Secretary of the Treasury or his delegate may by regulations prescribe, the amendments made by subsections (a) and (b) shall also apply to property which is property described in section 50(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] and which is placed in service in taxable years beginning before January 1, 1975 .” The amendments made by subsection (a) [amending this section] shall apply to property, the construction, reconstruction, or erection of which was completed after March 18, 1975 , or the acquisition of which by the taxpayer occurred after such date. The amendments made by subsection (a) [amending this section] shall not apply to property constructed, reconstructed, erected, or acquired pursuant to a contract which was on April 1, 1974 , and at all times thereafter, binding on the taxpayer. Where a person who is a party to a binding contract described in paragraph (2) transfers rights in such contract (or in the property to which such contract relates) to another person but a party to such contract retains a right to use the property under a lease with such other person, then to the extent of the transferred rights such other person shall, for purposes of paragraph (2), succeed to the position of the transferor with respect to such binding contract and such property. The preceding sentence shall apply, in any case in which the lessor does not make an election under section 48(d) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], only if a party to such contract retains a right to use the property under a long-term lease.” in the case of property placed in service after December 31, 1963 , with respect to taxable years ending after such date, and in the case of property placed in service before January 1, 1964 , with respect to taxable years beginning after December 31, 1963 .” The amendments made by subsection (b) [amending this section] shall apply with respect to property possession of which is transferred to a lessee on or after the date of enactment of this Act [ Feb. 26, 1964 ]. The amendments made by subsection (c) [amending this section] shall apply with respect to taxable years ending after June 30, 1963 . The amendments made by subsection (d) [amending section 1245 of this title ] shall apply with respect to dispositions after December 31, 1963 , in taxable years ending after such date.” is originally placed in service by such person during 2009, 2010, or 2011, or is originally placed in service by such person after 2011 and before the credit termination date with respect to such property, but only if the construction of such property began during 2009, 2010, or 2011. The amount of the grant under subsection (a) with respect to any specified energy property shall be the applicable percentage of the basis of such property. 30 percent in the case of any property described in paragraphs (1) through (4) of subsection (d), and 10 percent in the case of any other property. In the case of property described in paragraph (2), (6), or (7) of subsection (d), the amount of any grant under this section with respect to such property shall not exceed the limitation described in section 48(c)(1)(B), 48(c)(2)(B), or 48(c)(3)(B) of the Internal Revenue Code of 1986, respectively, with respect to such property. the date of the application for such grant, or the date the specified energy property for which the grant is being made is placed in service. Any qualified property (as defined in section 48(a)(5)(D) of the Internal Revenue Code of 1986) which is part of a qualified facility (within the meaning of section 45 of such Code) described in paragraph (1), (2), (3), (4), (6), (7), (9), or (11) of section 45(d) of such Code. Any qualified fuel cell property (as defined in section 48(c)(1) of such Code). Any property described in clause (i) or (ii) of section 48(a)(3)(A) of such Code. Any qualified small wind energy property (as defined in section 48(c)(4) of such Code). Any property described in clause (iii) of section 48(a)(3)(A) of such Code. Any qualified microturbine property (as defined in section 48(c)(2) of such Code). Any combined heat and power system property (as defined in section 48(c)(3) of such Code). Any property described in clause (vii) of section 48(a)(3)(A) of such Code. in the case of any specified energy property which is part of a facility described in paragraph (1) of section 45(d) of the Internal Revenue Code of 1986, January 1, 2013 , in the case of any specified energy property which is part of a facility described in paragraph (2), (3), (4), (6), (7), (9), or (11) of section 45(d) of such Code, January 1, 2014 , and in the case of any specified energy property described in section 48 of such Code, January 1, 2017 . In making grants under this section, the Secretary of the Treasury shall apply rules similar to the rules of section 50 of the Internal Revenue Code of 1986 (other than subsection (d)(2) thereof). In applying such rules, if the property is disposed of, or otherwise ceases to be specified energy property, the Secretary of the Treasury shall provide for the recapture of the appropriate percentage of the grant amount in such manner as the Secretary of the Treasury determines appropriate. any Federal, State, or local government (or any political subdivision, agency, or instrumentality thereof), any organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, any entity referred to in paragraph (4) of [former] section 54(j) of such Code, or any partnership or other pass-thru entity any partner (or other holder of an equity or profits interest) of which is described in paragraph (1), (2) or (3). Terms used in this section which are also used in section 45 or 48 of the Internal Revenue Code of 1986 shall have the same meaning for purposes of this section as when used in such section 45 or 48. Any reference in this section to the Secretary of the Treasury shall be treated as including the Secretary’s delegate. There is hereby appropriated to the Secretary of the Treasury such sums as may be necessary to carry out this section. The Secretary of the Treasury shall not make any grant to any person under this section unless the application of such person for such grant is received before October 1, 2012 .” the applicable percentage under section 46(c)(2) of such Code shall be determined as if the useful life of the film would have expired at the close of the first taxable year by the close of which the aggregate amount allowable as a deduction under section 167 of such Code would equal or exceed 90 percent of the basis of such property (adjusted for any partial dispositions), for purposes of section 46(c)(1) of such Code, the basis of the property shall be determined by taking into account the total production costs (within the meaning of section 48(k)(5)(B) of such Code), for purposes of section 48(a)(2) of such Code, such film shall be considered to be used predominantly outside the United States in the first taxable year for which 50 percent or more of the gross revenues received or accrued during the taxable year from showing the film were received or accrued from showing the film outside the United States, and Section 47(a)(7) of such Code shall apply. A taxpayer may elect to have this paragraph apply to all qualified films placed in service during taxable years beginning before January 1, 1975 (other than films to which an election under subsection (e)(2) of this section applies). subparagraph (B) of paragraph (4) shall not apply, but in determining qualified investment under section 46(c)(1) of such Code there shall be used (in lieu of the basis of such property) an amount equal to 40 percent of the aggregate production costs (within the meaning of paragraph (5)(B) of such section 48(k)), paragraph (2) shall be applied by substituting ‘100 percent’ for ‘66⅔ percent’, and paragraph (3) and paragraph (5) (other than subparagraph (B)) shall not apply. An election under this paragraph shall be made not later than the day which is 6 months after the date of the enactment of this Act [ Oct. 4, 1976 ] and shall be made in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe. Such an election may be revoked only with the consent of the Secretary of the Treasury or his delegate. No election may be made under this paragraph or subsection (e)(2) by any taxpayer unless he consents, under regulations prescribed by the Secretary of the Treasury or his delegate, to treat the determination of the investment credit allowable on each film subject to an election as a separate cause of action, and to join in any judicial proceeding for determining the person entitled to, and the amount of, the credit allowable under section 38 of the Internal Revenue Code of 1986 with respect to any film covered by such election. A taxpayer described in subparagraph (B) may elect to have this paragraph apply to all films (whether or not qualified) placed in service in taxable years beginning before January 1, 1975 , and with respect to which an election under subsection (e)(2) is not made. A taxpayer may make an election under this paragraph if he has filed an action in any court of competent jurisdiction, before January 1, 1976 , for a determination of such taxpayer’s rights to the allowance of a credit against tax under section 38 of the Internal Revenue Code of 1986 for any taxable year beginning before January 1, 1975 , with respect to any film. paragraphs (1) and (2) of this subsection, and subsection (d) shall not apply to any film placed in service by the taxpayer, and subsection 48(k) of the Internal Revenue Code of 1986 shall not apply to any film placed in service by the taxpayer in any taxable year beginning before January 1, 1975 , and with respect to which an election under subsection (e)(2) is not made, An election under this paragraph shall be made not later than the day which is 90 days after the date of the enactment of this Act [ Oct. 4, 1976 ], by filing a notification of such election with the national office of the Internal Revenue Service. Such an election, once made, shall be irrevocable.” The basis of any section 38 property (as defined in section 48(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) placed in service before January 1, 1964 , shall be increased, under regulations prescribed by the Secretary of the Treasury or his delegate, by an amount equal to 7 percent of the qualified investment with respect to such property under section 46(c) of the Internal Revenue Code of 1986. If there has been any increase with respect to such property under section 48(g)(2) of such Code, the increase under the preceding sentence shall be appropriately reduced therefor. subparagraph (A) shall not apply with respect to such property, but under regulations prescribed by the Secretary of the Treasury or his delegate, the deductions otherwise allowable under section 162 of such Code to the lessee for amounts paid to the lessor under the lease (or, if such lessee has purchased such property, the basis of such property) shall be adjusted in a manner consistent with subparagraph (A). The adjustments under this paragraph shall be made as of the first day of the taxpayer’s first taxable year which begins after December 31, 1963 .”