Weil Article: Transfers of Advanced Manufacturing Production Credits: Perspectives on a Busy Fourth Quarter

By Bryan Didier, Steven Lorch, Irina Tsveklova and Jonathan Macke

Last year—particularly the fourth quarter—saw a significant uptick in transfers of advanced manufacturing production credits (AMPCs) described under Section 45X.

Between the Weil and Monarch teams, we have had the opportunity to work on a significant number of these AMPC transfers. Many of these transfers successfully closed; however, others did not, with lessons learned in both circumstances.

This article provides background to the AMPC and our observations on the AMPC transfer market as we look forward to closing legacy 2024 transactions and to new opportunities in 2025.

Background to the AMPC
Section 45X was enacted as part of the Inflation Reduction Act of 2022 (the IRA). The U.S. Department of Treasury (Treasury) and the Internal Revenue Service (IRS) issued proposed regulations under Section 45X on December 14, 2023 and final regulations (the Final Regulations) on October 24, 2024.

Taxpayers may claim the AMPC for the domestic production and sale of eligible components (Eligible Components) to an unrelated person or, with a special election, a related person (each, a Component Buyer). Eligible Components include solar and wind energy components, inverters, qualifying battery components and certain critical minerals.

The AMPC is a production tax credit which is claimed based on the volume of Eligible Components produced by the taxpayer during the taxable year. The AMPC rate under Section 45X varies depending on the type of Eligible Component produced and the production method utilized by the taxpayer.

Taxpayers generally may claim the AMPC for Eligible Components produced and sold after December 2022 but, for components other than critical minerals, the AMPC will phase out starting in 2030 and terminate completely by 2033…