H.R. 5862 — American Energy Independence and Affordability Act

This section restores full credit amounts and eligibility under the clean electricity production credit (Section 45Y) for wind and solar facilities and leasing arrangements by (1) eliminating the phase-down of the credit amount to no more than 20% after 2027 (previously in 45Y(d)(4)), (2) striking restrictions on leasing arrangements (previously in 45Y(h)), and (3) repealing the exclusion for facilities relying on existing feasibility studies for emissions rates (previously in 45Y(b)(2)(C)(iii)). It also delays the credit phase-out to begin in the later of 2032 or the calendar year when U.S. electricity production greenhouse gas emissions reach 25% or less of 2022 levels (previously fixed at 2032 under 45Y(d)(3)). The amendments apply as if included in section 70512 of Public Law 119-21.

This section restores the clean electricity investment credit under Section 48E for wind and solar facilities by repealing their termination (previously under subsection (e)(4)). It further restores the credit for expenditures related to wind and solar leasing arrangements by striking Section 48E(i) (with conforming redesignations) and Section 50(e). The section also increases the energy credit percentage for certain energy property to 2% (from 0%) under Section 48(a)(2)(A)(ii). (Thus, these changes apply as if included in section 70513 of Public Law 119–21.)

This section revises the advanced manufacturing production credit (Section 45X)—which provides tax credits for U.S. production of eligible clean energy components (e.g., solar wafers, wind blades, battery cells) and critical minerals—as follows: (1) repeals the inclusion of metallurgical coal as an applicable critical mineral by striking subparagraph (R) of 45X(c)(6) and redesignating subsequent subparagraphs; (2) repeals the termination of eligibility for wind energy components by striking subparagraph (D) of 45X(b)(3) (thus, allowing such credits to continue indefinitely); and (3) makes conforming amendments to remove related references to metallurgical coal and the wind termination. The amendments apply as if included in section 70514 of Public Law 119-21.

This section repeals the prohibition on increasing the allocation limit for the advanced energy project credit (i.e., IRC §48C credit for qualified investments of up to 30% in manufacturing facilities for clean energy components, batteries, and critical minerals processing) by amending Section 48C(e)(3)(C) to provide that such limit shall be increased (previously, shall not be increased). The amendment applies as if included in section 70515 of Public Law 119-21.

This section revises the construction commencement date threshold in the clean hydrogen production tax credit to January 1, 2033 (from January 1, 2028). (As background, the credit provides eligible taxpayers a production tax credit of up to $3 per kilogram of qualified clean hydrogen—produced at a qualified facility with lifecycle greenhouse gas emissions rates below specified thresholds, which vary by tier and tighten over time.)

This section extends the residential clean energy credit—available at 30% of qualified costs for solar, fuel cell, small wind, geothermal heat pump, and battery storage equipment installed at a principal residence—to property placed in service through December 31, 2034 (from expenditures after December 31, 2025). It further revises the credit percentage schedule to (1) 30% for property placed in service before January 1, 2033; (2) 26% for property placed in service in calendar year 2033; and (3) 22% for property placed in service in calendar year 2034.

This section reinstates a special rate for sustainable aviation fuel (SAF) under the clean fuel production credit (i.e., IRC § 45Z, which provides tax credits of up to $1.00 per gallon—or $0.20 per gallon without prevailing wage and apprenticeship requirements—for producing and selling low-greenhouse-gas transportation fuel), increasing the applicable amount to 35 cents per gallon (from 20 cents) for SAF produced at qualified facilities without such requirements and to $1.75 per gallon (from $1.00) for SAF from facilities meeting them. It defines SAF as non-kerosene liquid fuel sold for aircraft use that meets specified ASTM International standards and excludes fuel derived from palm fatty acid distillates or petroleum. The section makes a conforming amendment to apply inflation adjustments to the new rates and takes effect as if included in the original § 45Z enactment.

This section restores the product identification number (PIN) requirement for the energy efficient home improvement credit (IRC § 25C) for specified property—qualified energy property and certain building envelope components (e.g., insulation, windows, doors)—placed in service after December 31, 2024 (previously inapplicable). To claim the credit, such property must be produced by a qualified manufacturer that agrees with the Secretary to assign unique PINs to each item, label the items, and submit periodic reports to the IRS; taxpayers must include the PIN on their tax return.

This section extends the New Energy Efficient Home Credit to qualified homes acquired before December 31, 2032 (from June 30, 2026). (The credit, under Section 45L, provides eligible homebuilders a tax credit of up to $5,000 ($2,500-$5,000 depending on energy efficiency certification levels) for each qualifying energy-efficient new home sold to the homeowner.)

This section expands the definition of 5-year property under the modified accelerated cost recovery system (MACRS) to include solar and wind energy property—property described in IRC §48(a)(3)(A) (i.e., qualifying for the energy investment tax credit), as modified by substituting “solar or wind energy” for “solar energy” and disregarding certain exclusions in the last sentence of that subparagraph—by inserting a new subclause (I) and redesignating existing subclauses in IRC §168(e)(3)(B)(vi). (Thus, owners of such property may depreciate it over 5 years.) The amendment applies as if included in section 70509 of Public Law 119-21.

This section extends the previously-owned clean vehicle tax credit to qualified vehicles acquired after December 31, 2032 (from after September 30, 2025). (Thus, taxpayers may claim a tax credit of up to $4,000 for the purchase of a qualified previously-owned clean vehicle before January 1, 2033.)

This section extends the new clean vehicle tax credit by revising the termination provision to apply to vehicles placed in service after December 31, 2032 (from acquired after September 30, 2025). (As background, the credit provides up to a $7,500 nonrefundable tax credit ($3,750 if only partial requirements met) for qualified new plug-in electric or fuel cell vehicles purchased by eligible taxpayers that satisfy price caps, income limits, and phase-in requirements for North American-sourced battery components and critical minerals.) The section also modifies the phase-in schedules for those content requirements as follows: (1) for battery components, adding an 80 percent North American content requirement for vehicles placed in service after December 31, 2026; and (2) for critical minerals, adding requirements of 80 percent for calendar year 2027, 90 percent for 2028, and 100 percent thereafter.

This section extends the commercial clean vehicle credit through December 31, 2032 (from September 30, 2025). (Thus, businesses may claim a tax credit of up to $7,500 for qualified commercial clean vehicles with a gross vehicle weight rating of 14,000 pounds or less, or up to $40,000 for heavier vehicles, placed in service before January 1, 2033.)

This section extends the alternative fuel vehicle refueling property credit through December 31, 2032 (from June 30, 2026). (Thus, taxpayers may claim a tax credit of up to 30% of costs, capped at $100,000 per property, for qualified clean-fuel refueling property—e.g., electric vehicle chargers—placed in service before January 1, 2033.)