Crux recently shared our “1Q2026 Market Update” reports with clients, offering sector-specific insights into how the transferable tax credit market evolved through the first quarter of 2026.
Josh Price, Director of Intelligence & Research on Crux’s Market Intelligence team, recently sat down with Crux’s marketing team to discuss the reports’ key findings, what the data is saying about pricing and demand, and what the Market Intelligence team is watching for the rest of the year. Their conversation has been lightly edited for clarity and length.
Crux: Before we dig into the data, can you tell us what this quarterly report is designed to do and what went into putting it together?
Josh Price: I think about this report as supplementing our biannual, industry-leading Market Intelligence Report to provide additional granularity and transparency into how the clean energy finance market as a whole — and specific sectors within it — are evolving.
For the first time, we've created four specific sector reports for our quarterly market updates:
We have clients on all sides, so we're diving deeper into each of these sectors to show people what we're seeing in the market.
Crux: This update notes that the market entered 2026 on firmer footing. What notably changed between Q4 of 2025 and Q1 of 2026?
JP: There are a few things, but I'll start with the buyer side of the market. The One Big Beautiful Bill (OBBB), which passed in the third quarter of last year, created a lot of uncertainty — not just for developers trying to figure out what the rules of the road are for generating their tax credits, but also for buyers figuring out what their tax liability was going to be for 2025.
Toward the end of last year, there was still uncertainty over what buyers would owe in 2025, and if you don't know your tax liability, it's hard to transact in the market — you don't know what or how much to buy. One of the things we found in our annual report was that by the end of Q1 2026, 85% of the buyers we surveyed expected to know their 2025 tax liability. This increased certainty helped pull demand forward and get more folks in the market in Q1 relative to what we saw at the end of last year.
The other big item was increased clarity on the foreign entity of concern (FEOC) rules. The OBBB changed how both tax credit generators (or sellers) and buyers have to look through their ownership structures and supply chains to decouple from China and other foreign entities of concern in order to qualify for certain tax credits. There was a lot of uncertainty in 2025 over how the FEOC restrictions, material assistance rules, foreign ownership rules, etc., would impact both sides of the market. In February 2026, we did get some initial intel — Treasury issued interim rules that provided some clarity, particularly on material assistance cost ratio calculation, which helped both sides of the market get more comfortable with supply chains. There's still some uncertainty related to ownership rules and additional contracting, but we viewed the interim rules as a big positive to help provide initial clarity in the market.
Crux: Can you describe what you've observed in average pricing across the market over the course of Q1?
JP: I'd say pricing variation was more a story of credit quality, seller quality, and credit type. On net, pricing was largely flat from Q4 2025 to Q1 2026.
For 2025 ITCs, pricing averaged $0.909, and the pricing signals across the sectors were a bit mixed. Utility-scale ITCs — which typically have stronger developers and backers — rose from $0.914 to $0.926, while we saw residential ITCs decline from $0.920 to $0.900. The residential ITC market had some struggles in Q1 and parties were skittish on both sides of the market. We also saw a slight decline in C&I pricing. I think the delta between utility-scale and distributed generation ITCs pricing reflects some of the differences in seller quality.
For 2025 PTCs, pricing was also pretty flat and varied by sector. We didn't really see any uniform market direction; some were pushed upwards a bit, like clean fuel PTCs and manufacturing PTCs. The supply of 2025 credits was increasingly constrained, and for high-quality credits there are definitely buyers.
With 2026 vintages, the dynamics look a bit different. ITC pricing dropped slightly, by 0.6% to $0.895, though we have seen demand pick up pretty significantly. This pricing is pretty typical with some of the seasonal patterns we've observed in prior years.
2026 PTCs picked up around 2%, jumping from $0.900 to almost $0.917. Utility-scale spot PTCs were pretty limited on the power side, but we did see increased activity for §45Z given some positive regulatory developments, and demand and pricing for manufacturing PTCs held pretty steady.
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Crux: Q1 was a particularly active policy environment for many of the newly eligible technologies for transferable tax credits. What were the standout developments in Q1?
JP: There were more wins than losses across the board, which might surprise some folks. A few standouts:
The trade outlook is still murky overall, but on net, Q1 was a positive quarter for the sector.
Crux: What do you think the most important takeaway from each of these reports is?
Utility-Scale
JP: I want to highlight two related themes from the utility-scale market in Q1. Both of these trends were caused, at least in part, by data center load growth.
First, we saw significant M&A activity in Q1 driven by surging demand, both from data center load growth and also across the board demand from manufacturing and onshoring. We've seen some really interesting structures where hyperscalers are actually acquiring companies, like we saw with the Google-Intersect deal. We expect this activity to continue, as it's a very hot market right now and people are trying to get electrons from wherever they can.
Second, regulators at both the federal and state level are grappling with how to address significant load growth driven by data centers and onshoring, and what the new rules of the road are to facilitate economic activity while protecting existing customers from increased rate shock. Affordability has been the major theme heading into the 2026 midterm elections, and we saw it was a major theme in 2025 elections as well. We're also watching how different regional grid operators — like PJM, which is in the Mid-Atlantic and is the epicenter of the data center and AI booms — grapple with that data center load growth and what that might mean for battery storage in particular.
To highlight one insight from the report: PJM has proposed a new type of auction focused on facilitating bilateral deals between data centers and new generation resources that can be online by 2031. Given constrained supply chains — particularly for gas generators and turbines — we think batteries are going to be a big winner from this auction.
Distributed generation
JP: In distributed generation, affordability politics are increasingly splitting the sub-sector into winners and losers — with community solar gaining ground as a pro-affordability solution, while rooftop solar comes under pressure on cost-shifting grounds.
The theme of affordability was very present in state legislatures in Q1, and rooftop solar in particular was under the gun. The fight centered on net energy metering — how rooftop solar owners are compensated for selling power back to the grid. The dominant concern right now, exacerbated by growing affordability pressures, is cost shifting: how do we ensure that ratepayers without rooftop solar aren't paying for parts of the grid that solar owners no longer use but still need to be maintained? That debate is reshaping the residential solar business model in real time.
Community solar fared better. Many state legislatures are trying to figure out what programs they can cut, how to support low-income ratepayers, and how to put a lid on rate pressures. Community solar has positioned itself well in that environment and we saw some real wins in Q1. Illinois signed an omnibus energy law that, among other things, doubled the maximum size of community solar projects from 5 MW to 10 MW. Virginia expanded their community solar programs as well. One of the main reasons community solar has gained traction — particularly in blue states — is that it gives renters and people who don't have their own roof a way to access solar. So, I think the community solar industry has taken a stance as a pro-affordability solution, while rooftop solar has been more on its back foot.
Advanced manufacturing
JP: On the advanced manufacturing side, FEOC was a dominant concern in Q1. FEOC kind of cuts both ways. On one hand, if you have really clean supply chains and you're manufacturing panels, these are good rules for you — they drive demand for domestic manufacturers and domestic components. On the other hand, you have to make the same representations and you have similar ambiguities around ownership rules that are lingering out there. Additionally for manufacturers, FEOC applies to products sold this year — you don't have the phase-in you see with §48E and §45Y.
Now, I think there's a huge focus from this administration on manufacturing and on critical minerals; we've seen a new $500 million funding program open up at the Department of Energy, so the policy side has been pretty favorable, and pricing has remained strong for §45X credits as a result.
Clean fuels
JP: Finally, on the clean fuel side, I think the most notable win for renewable fuel producers this year was the RFS volumes, as I noted. The Renewable Identification Number, or RIN credit — which is essentially a number attached to every gallon of fuel produced with a value that depends on the demand set by EPA — prices are near historic highs. The D4 RIN, which is for renewable diesel and biodiesel producers, was around $1.95 the last time I checked, compared to the §45Z credit, where you’re getting maybe $0.30 or $0.40 a gallon as a renewable diesel producer. With D4 RINs at this price, you're getting almost $3 a gallon — a huge piece of the equation for renewable diesel producers. Same for renewable natural gas producers: we're seeing D3 RINs, which are the credit for renewable natural gas or RNG producers, around $2.40. That is almost $30 per MMBtu, whereas right now, under the §45Z rules for an RNG producer, you're getting anywhere from $4 to $8 per MMBtu. This is a huge policy win for clean fuel producers, particularly in the context of high finished fuel prices.
There's often a conflation that support for biofuels is inflationary and puts upward pressure on gasoline and diesel prices. That argument obviously didn't land with the Trump administration. They went very strong on biofuels despite concerns over the Iran war and elevated prices. That was really the most notable win for the clean fuel sector, in addition to the favorable §45Z guidance. We're seeing that positive momentum reflected a bit in pricing — largely flat, but a bit up for §45Zs.
Crux: Looking towards the rest of 2026, what are you watching, and what is the team watching most closely?
JP: Sure. One major theme we’re watching is whether we see a return to some of the seasonality in pricing we saw in 2024 in a year without a big piece of legislation like the OBBB, and the extent to which the market normalizes without a major disruption.
As we talked about in our annual report, the 2025 market was a tale of two halves. The first half was a very strong continuation of the trends we saw in 2024 until those trends were interrupted by OBBB. And our report analyzed the impact that had on both sellers and buyers as the market digested those changes. Some of the analysis we've run on PTCs shows on average there's a 2% price increase from January to December, so we'll be watching very closely to see if the market returns to normal or grows after the disruptive year we saw last year. It seems to be growing, and it grew last year despite that disruption. So we're pretty optimistic, and we're going to be watching for clues to see how the situation unfolds.
From a policy perspective, we are paying close attention to the tax credit “cliff” for solar and wind projects on July 4, 2026. As a reminder, projects need to begin construction before that date to guarantee a 4-year eligibility period for a tax credit. Projects starting construction after that date probably need to pencil out without a tax credit, and we will be looking at how those projects fare when raising capital. We’re also closely monitoring Treasury for additional clarity on the FEOC rules to see how the market matures in response.
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