SECTION 1. Background

.01 In General . Section 48(a)(5) allows taxpayers to irrevocably elect to take the investment tax credit determined under § 48 in lieu of the production tax credit under § 45 with respect to certain renewable energy facilities. Section 46 provides for the investment tax credit and includes in that credit the energy credit determined under § 48. Except as otherwise provided in § 48(c)(1)(B), (2)(B), and (3)(B), the energy credit for any taxable year is the energy percentage of the basis

of each energy property placed in service during the taxable year. Section 48(a)(1). Section 48(a)(5)(A) provides that qualified property that is part of a qualified investment credit facility shall be treated as energy property for purposes of § 48, and that the energy percentage with respect to such property shall be 30 percent. Section 48(a)(5)(C) provides that taxpayers may elect to treat certain qualified facilities (within the meaning of § 45) as qualified investment credit facilities. Section 48(a)(5)(B) provides that no credit shall be allowed under § 45 for any taxable year with respect to any qualified investment credit facility.

.02 Qualified Investment Credit Facil- ity . Section 48(a)(5)(C) provides that the term “qualified investment credit facility” means a qualified facility (within the meaning of § 45)—

(1) that is described in § 48(a)(5(C)(i) or (ii);

(2) for which the taxpayer makes an irrevocable election to have § 48(a)(5) apply; and

(3) with respect to which no credit has been allowed under § 45.