Currents Ep337: How Tax Credit Markets Weathered 2025
Feb 26, 2026
Alfred Johnson, co-founder and CEO of Crux and author of its Market Intelligence reports, shares findings from Crux’s 2025 market study. He covers resilience in tax credit transfers and pricing, the surge in hybrid tax equity and battery storage growth, shifting capital deployment and safe-harbor capacity, and how policy and reshoring shaped market behavior.
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Tax Credit Prices Eased In The Back Half Of 2025
- Pricing eased in H2 2025 with less transaction volume in the back half; IG ITC averages modestly fell from 94 to 93 cents.
- Non‑IG ITCs and PTCs each softened about one cent, reflecting reduced buyer tax liability after summer tax law changes.
Hybrid Tax Equity Drove Most Market Growth
- Hybrid tax equity grew materially, expanding the retained tax equity market from ~$20 billion historically to about $36 billion today.
- About $22 billion of retained hybrid tax equity represents the incremental growth from transferability.
Safe Harbor Pipeline Will Support Tax Equity Through 2029
- Large safe harbor pipeline remains: ~70 GW safe‑harbored under prior Section 48 and ~170 GW safe‑harbored by any method.
- That backlog will deliver credits through 2026–2029 and support tax equity volumes despite eligibility changes.