Solar and Energy Credit Promotions

Classification A, B or C, depending on the variant. A for solar lens; B/C for real projects and credit transfers

Sold as: "solar lens", "buy a solar project and offset your W-2", "energy credit investment", "transferable credit purchase"

The energy credit is a passive credit. If you are a W-2 earner or an active S corp owner without material participation, you cannot use it, and the pitch usually does not mention that.

The pitch

Buy into a solar project and offset your W-2 or S corp income with the energy credit. Or buy someone else's credit at a discount under the transfer rules and apply it to your own return.

What it costs you if it is wrong

A residential Sec. 25D credit claimed for 2026 does not exist to be allowed. On a real project the credit is passive under Sec. 469 unless you materially participate, so it sits unused rather than offsetting your W-2. A purchased Sec. 6418 credit carries Sec. 50(a) recapture risk to you as the buyer, plus a 20 percent excessive credit transfer penalty under Sec. 6418(g)(2).

Red flags

The pitch is a residential Sec. 25D credit, which terminated after 2025
You are a W-2 earner and nobody mentioned Sec. 469
The credit seller has no IRS pre-filing registration number
The equipment cannot be shown to exist or produce power
Investors are recruited by other investors

Questions to ask the person selling this

1Which credit is this, and is it still available after the OBBBA termination dates?
2I am a W-2 earner. How do I use a passive credit under Sec. 469?
3If this is a transferred credit, what is the seller's IRS pre-filing registration number?
4Can I see the equipment, and is it producing power?
5Who bears recapture risk under Sec. 50(a), and is there an indemnity?

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