Solar-plus-storage and federal policy to drive investment tax credit trends in 2026

“The passage of the OBBBA has principally had an impact on the buy side of the market, at least in the short term. It’s changed the corporate tax capacity of a lot of very large corporations, and broadly introduced uncertainty into what a company’s ultimate tax liability will be for 2025 and 2026,” explains Katie Bays, lead researcher at Crux.

“What really happened is that most corporates have essentially had to go back to their accounting teams, their third-party accounting firms, and try to figure out what that impact is going to be.

“That led to a certain amount of softness in the market in the third quarter, but we have seen the market recover pretty materially in the fourth quarter. Ultimately, what’s happening is that’s what’s going on in the demand side. What is also happening is the supply side of the market grew extremely robustly in 2025, and it tracks closely with the pace of installations for some of the largest clean energy categories, which are particularly solar and storage,” says Bays.

PV Tech Premium speaks with Bays about how these trends could impact the transferable tax credit market in 2026 for solar PV and also energy storage, and more particularly for co-located projects with both technologies, which has become the standard for independent power producers (IPPs), while utilities are catching up on the trend.

What to expect in 2026?

When asked about what we can expect more of in 2026, Bays mentioned three different topics. The first one, which is more of a continuation of what was seen in 2025, is a significant market penetration of solar PV and energy storage, as well as the combination of both technologies as more solar-plus-storage projects reach commercial operations in 2026.

“The fastest-growing part of the market is actually the solar plus storage segment,” says Bays. “The combination of solar-plus-storage has really shown to be a winning combination in the market.”

Bays says that the second trend we can expect in 2026 is the construction of energy storage projects from utilities, as these are “historically a little bit slower to adopt new technologies”.

“When we looked at who was actually selling those solar tax credits in 2025, a lot of those were the utilities, while the IPPs had trended more towards the combined solar-plus-storage. We would expect to see utilities follow the IPPs and install more hybrid solar-plus-storage projects going forward. I think this is due to a variety of reasons, including the lowering cost of storage, the reliability benefits of storage, and other factors,” adds Bays.

The third aspect that is worth keeping in mind for this year comes from the data centre industry and the deployment of energy storage with data centres.

“We did begin to see in 2025 some of the first successful deployments of energy storage with a data centre. Crux worked on a very large transaction of that variety. And that’s another use case where we expect to see better adoption of energy storage by data centres, but we hadn’t really seen that roll out in full in 2025,” explains Bays.

On the plus side, considering that many of the hyperscalers acquiring renewable energy to power their data centres are large, creditworthy entities, it makes this type of transaction more attractive from the buyer’s perspective.

“Ultimately, the buyer’s principal concern is the indemnity and the counterparty risk. Those transactions do typically have good profiles with both of those characteristics,” says Bays.

New market participants on the rise

Bays suggests that 2026 could be similar to 2023, when the market was new and many new rules were introduced. The introduction of FEOC could bring the market to that same experience, with people trying to understand “a very dynamic environment”.

“I think we will be back in that situation in 2026, due to the introduction of FEOC, as we are seeing an influx of new buyers. Obviously, as our data has shown, participation on the buy side of the Fortune 1000 increased 60% year-over-year. It’s a lot of new market participants doing their first transaction.”

Although it is beneficial to have new market participants, this also presents some challenges for companies that are not necessarily aware of how to navigate these types of transactions. The solar industry, as well as the energy storage sector, which is seeking to secure the sale of tax credits for their projects, will need to be prepared to expect questions, especially with the implementation of such legislation as FEOC and the fact that some guidance on FEOC still needs to be published.

“That’s where standardisation tools and market standards become really, really important, because without them, the natural effect of new rules, new regulations, new players, is a slowdown in transactions, so it takes longer, costs more, there’s more legal spend, etc,” explains Bays.

Increased interest in advanced manufacturing tax credits

Last year was marked by a surge in new operational solar PV manufacturing capacity in the US, almost at all levels of the supply chain. By February 2025, the US had surpassed the 50GW threshold of annual nameplate capacity for modules, which has since grown to more than 60GW. And during Q3 2025, solar manufacturer Corning started operations at its ingot and wafer plant in Michigan, which meant that the US solar industry was able to produce the entire supply chain domestically, from polysilicon to modules.

This also means that more Section 45X tax credits will be available in the market, and as Bays mentions, advanced manufacturing tax credits are one of the areas where Crux has seen the most corporate demand.

“What we have found is that those 45X advanced manufacturing tax credits tend to be very popular with buyers,” says Bays. Now that all tax credits for 2025 have been generated, making it easier to know how many components have been manufactured and sold, Bays says this makes due diligence “pretty straightforward”.

“Production tax credits, as a general matter, have a lower risk profile, and the pricing on those 45X tax credits tends to be lower than for the electric power generating PTC,” Bays adds, “There is a nice sort of additional discount that many buyers are able to achieve when they purchase 45X credits.”

These elements have made advanced manufacturing tax credits interesting in the tax credit market, even more so for 2026 with volume traded likely to increase. Especially considering that many companies have been working on understanding the FEOC rules, which came into effect this year.

“Just as buyers are kind of on the sideline of evaluating tax capacity, many of our 45X companies have been busy understanding foreign entity of concern rules and have not necessarily been as active in the tax credit market as they were this time last year, so we are seeing a bit of a lag on that side.

“They do have to sell them eventually, a lot of those credits will come into the market in 2026.”

Bays adds that for companies that do not need to worry about FEOC compliance, this is a straightforward job where it only requires a “box checking exercise” and can easily sell their 45X tax credits.

“We see companies which are generating the 45X credits that are forward selling them over the life of that tax credit. We’re seeing seven-to-eight year term 45X deals, which inherently mean the buyer is committing to purchase credits that are subject to FEOC compliance, but the facts of that particular company and the products that they manufacture are simple and straightforward.”