Most people know the solar ITC is 30%. What fewer realize is that the Inflation Reduction Act created three stackable bonus adders that can push the effective credit to 50%, 60%, or even 70% of project cost. For a $3M community solar project, that's the difference between a $900K credit and a $2.1M credit.
Here's exactly how it works, with real numbers from projects in our database.
The ITC stacking formula
| Credit Component | Rate | Requirement |
|---|---|---|
| Base ITC | 30% | Solar, storage, or wind <1MW (or meets prevailing wage + apprenticeship) |
| Energy Community Bonus | +10% | Project in coal closure tract or fossil fuel employment MSA |
| Low-Income Community Bonus | +10% | Project in qualifying low-income census tract (Category 1) |
| Low-Income Residential Bonus | +20% | Qualifying low-income residential or Indian land (Category 2-4) |
| Domestic Content Bonus | +10% | Steel/iron manufactured in US, 40%+ of components domestic |
| Maximum Effective ITC | 70% | All bonuses stacked |
Example 1: Community solar in Pennsylvania coal country
750 kW Solar — Cambria County, PA
Energy community (coal closure) + low-income census tract
| Estimated project cost | $2,250,000 |
| Effective ITC rate | 70% |
| Estimated ITC value | $1,575,000 |
Cambria County qualifies for EC (coal closure) and has qualifying low-income census tracts. Using domestic-sourced panels meets DC bonus.
Example 2: Rooftop solar in Texas oil country
500 kW Solar — Midland, TX
Energy community (FFE) + low-income eligible
| Estimated project cost | $1,500,000 |
| Effective ITC rate | 50% |
| Estimated ITC value | $750,000 |
Midland MSA qualifies for EC via fossil fuel employment. Low-income Category 1 adds 10%. No domestic content claimed in this scenario.
Why sub-1MW matters
Projects under 1 MW AC automatically qualify for the full 30% base ITC without meeting prevailing wage and apprenticeship (PW&A) requirements. Larger projects must pay prevailing wages during construction and use registered apprentices — a compliance burden that adds cost and complexity.
This makes sub-1MW solar the sweet spot for individual investors:
- Lower total capital ($1-5M vs. $50-500M for utility-scale)
- No PW&A compliance needed for base 30% rate
- Higher bonus stacking probability (community solar projects are more likely to be in qualifying census tracts)
- Direct transfer eligible under IRA Section 6418
How to find stackable projects
Our database scores every project for ITC eligibility. The /deals/itc endpoint returns projects filtered by investability score, with energy community eligibility, low-income eligibility, domestic content eligibility, and effective credit rate pre-calculated. 124 projects currently score as investable.
Key fields to filter on:
| API Field | What It Tells You |
|---|---|
| energy_community_eligible | Whether the project qualifies for +10% EC bonus |
| low_income_eligible | Whether the project is in a qualifying census tract |
| domestic_content_eligible | Whether DC bonus criteria are likely met |
| effective_credit_rate | Pre-calculated total ITC rate with all applicable bonuses |
| investability_score | 0-100 score combining ITC eligibility, size, stage, developer quality |
The math: why credit stacking changes project economics
Consider two identical 800 kW solar projects at $3/W ($2.4M total cost):
| Project A (base only) | Project B (fully stacked) | |
|---|---|---|
| Base ITC | 30% = $720K | 30% = $720K |
| EC bonus | — | +10% = $240K |
| Low-income | — | +20% = $480K |
| Domestic content | — | +10% = $240K |
| Total credit | $720,000 | $1,680,000 |
| Net cost after credit | $1,680,000 | $720,000 |
Project B's investor recovers 70% of the project cost in year one through the tax credit alone, before any electricity revenue. That's the power of stacking.
Risks and caveats
Low-income bonus requires application. Unlike EC and DC, the low-income bonus (Categories 1-4) requires a DOE allocation. There's an annual 1.8 GW cap, with separate allocations for each category. Demand exceeds supply.
Domestic content requirements tighten over time. The manufactured components threshold starts at 40% (2024-2026) and increases to 55% (2027+). This is manageable now but will get harder.
PW&A matters for >1MW. If the project is over 1 MW and doesn't meet PW&A, the base rate drops to 6% (not 30%). The bonuses scale proportionally. Don't miss this.
Calculate credits for any project
Use our tax credit calculator API to model ITC stacking for any technology, location, and capacity.
Explore the API