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With 2025 behind us, Crux's Tax Investor Coverage team shared their insights into last year’s tax credit market and how leading corporate tax teams are planning for 2026.
How has pricing evolved across different credit types? What’s driving those differences?
Clark Conlisk (Principal): Pricing over the last year has reflected an adjustment of the market to reduced buyer tax capacity following passage of the One Big Beautiful Bill (OBBB). High-quality production tax credits (PTCs) and investment tax credits (ITCs) from investment-grade sellers remained popular throughout 2025, even as pricing softened compared to pre-OBBB expectations. Some market participants describe this as a “flight to quality,” but I think “flight to familiarity” is a more accurate framing.
During periods in which tax teams are recalibrating forecasts and their broader tax-planning strategies, buyers have gravitated toward asset types, structures, and counterparties they understand well — utility-scale projects, established sponsors, and straightforward documentation. In response to reduced demand, many large sellers have successfully brought smaller tranches to market to maintain buyer engagement and momentum.
Ted Lee (Principal): Pricing continues to be higher for credits that are simple and well-documented and that minimize buyer risk. Credit types with proven eligibility and established market norms trade at smaller discounts. Credits that require heavier diligence (due to number of assets or project complexity) continue to trade at wider discounts.
As insurance becomes more standardized and advisors align on market norms, pricing differences across credit types — within the categories of PTCs and ITCs — are narrowing. Buyer comfort with §45Z credits has increased meaningfully. Earlier pricing reflected uncertainty around credit variability and the absence of final guidance, but buyers and sellers are now structuring transactions to allocate that variability appropriately.
How should first-time buyers position themselves to enter the tax credit market in 2026?
Stephanie Deterding (Managing Director): The transaction process is more straightforward than many first-time buyers expect. It typically unfolds in three main phases: sourcing and selection, diligence and documentation, and closing. Most transactions take between six weeks and a few months from initial engagement to close, though the timeline can be compressed for simpler deals or extended for more complex structures.
After receiving approval from your internal stakeholders, start by identifying opportunities that fit your criteria. That’s part of what we do at Crux — curate a pipeline of options and help buyers evaluate them against their specific needs.
The diligence and documentation phase involves reviewing project documentation, seller financials, and structuring appropriate protections. This is where working with experienced advisors really accelerates the process — they can assist on the technical heavy lifting while you focus on internal alignment.
Last is closing, where final documents are executed, payment is wired, and the Internal Revenue Service (IRS) transfer election is filed, often within a matter of days once diligence is complete.
Many first-time buyers are surprised at how collaborative the process is. You’re not navigating the market alone. An experienced advisor like Crux works with you along the way to help you understand what’s standard for the market, connect you with trusted legal and insurance providers when needed, and ensure the diligence process runs smoothly and efficiently.
Grace Chan (Senior Manager): The key is to start earlier than you think you need to. Even if you're just exploring the market, an initial conversation with an experienced advisor can help you understand what preparation makes sense for your organization and what a realistic timeline looks like for your first transaction.
Starting early has other benefits, too. We find that the first two quarters of the year typically offer the greatest supply of tax credits, more competitive pricing, and greater flexibility on timing. That’s especially true for credits from the previous tax year (e.g., vintage 2025 tax credits in 2026). In the first quarters of 2024 and 2025, we saw a significant drop-off in available credits for the previous tax year, which left some buyers unable to find a tax credit or paying a higher price.
Early execution also allows buyers to reduce their quarterly estimated tax payments sooner, improving cash flow even before the credit purchase price is paid.
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How can corporate tax teams strengthen their approach to due diligence on tax credit transactions?
Clark Conlisk (Principal): The most effective way to improve the due diligence on a transaction is to have a clear understanding of the boundaries of your comfort on key issues before entering a transaction. Where tax teams most often experience friction isn’t market uncertainty — it’s having to resolve foundational questions about their flexibility mid-negotiation. The most sophisticated buyers work with Crux and outside counsel early to outline their risk tolerance and preferred risk mitigants, often through a formal investment policy. That policy becomes the operating system for repeatable, efficient execution, allowing teams to institute a program of tax credit acquisition that affords returns and optionality to their tax-management strategies.
Stephanie Deterding (Managing Director): A core component of diligence is understanding the full credit support package standing behind the credits, including the strength of the seller’s indemnity and whether additional risk transfer — such as tax credit insurance — is appropriate. Tax insurance has become a well-accepted way for buyers to achieve certainty. For many buyers, insured transactions provide a clean and efficient path to execution and are an important part of a diversified tax credit strategy.
At the same time, buyers benefit from seller indemnities backed by the financial strength of the seller’s or seller parent’s balance sheet. While not all sellers will be investment-grade and credit-rated, many still have strong annual EBITDA, ample liquidity, and reliable access to capital or undrawn credit facilities. Buyers who are comfortable underwriting those financials — often with Crux’s help — can, in certain situations, get comfortable proceeding without insurance and capture a meaningful increase in return in exchange.
What red flags should buyers watch for during project-level diligence?
Grace Chan (Senior Manager): The primary audit focus to date has been excessive basis risk, which applies only to investment tax credits. If you’ve heard the term “basis step-up,” “basis risk,” or “excessive transfer,” these are all related matters. This risk arises when the value of the project (and the basis on which the credit is assessed) is increased through a change in ownership prior to the project being placed in service, resulting in a higher claimed credit. This is also known as a “stepped-up basis.”
Buyers should expect a clear narrative around how eligible basis was determined, how any step-ups were calculated in ITC transactions, and how documentation aligns across legal, tax, engineering, and financial materials. Crux works alongside buyers and their outside counsel to proactively mitigate these risks so protections are well established during term sheet negotiations.
Brandon Schneider (Principal): As a result of the increasing demand for tax credit insurance in this space and a limited supply, the insurance market is getting tighter. Insurers can command higher prices and stricter terms, including more exclusions. Buyers should therefore be wary of positions that insurers are unlikely to cover or view as out-of-market — both as an indicator of where it will be difficult to get coverage and where the market perceives there to be enforcement risk.
One area that has been a frequent question for years is large basis step-ups. More recently, ensuring documentation is complete for prevailing wage and apprenticeship requirements — as well as other bonuses — is critical. Going forward, buyers should also prepare to assess prohibited foreign entity and material assistance compliance.
What were the biggest shifts you saw in the tax credit buyer market in 2025, and how are those trends shaping early 2026 activity?
Ted Lee (Principal): Last year was a year of policy uncertainty: 2025 started with open questions about how tax legislation would affect corporate liability and the market for clean energy tax credits and — even after the passage of the OBBB — ended with the potential for additional regulatory developments. As a result, even though it was still a year of growth for the market overall and we saw more buyers entering the market for the first time, many corporate tax teams needed more time to think through their tax credit strategies.
As we kick off 2026, market activity is already picking up materially. As a result of the new prohibited foreign entity and material assistance rules coming into effect, diligence is also becoming more complex. Crux is well-positioned to combine expertise across capital markets, policy, and tax to help buyers navigate this market.
Read more: Benchmarking corporate taxpayer participation in the tax credit market
Stephanie Deterding (Managing Director): The best way to describe demand in 2025 was measured, not absent.
Early in the third quarter, the prevailing message from buyers was not “no,” but “not yet.” Many corporates have been working through the implications of accelerated expensing under Section 174A and the continued availability of bonus depreciation, both of which reduced many companies’ near-term taxable income and temporarily constrained tax credit capacity for 2025.
This dynamic is reminiscent of what followed the 2017 Tax Cuts and Jobs Act (TCJA). After TCJA, tax equity investors paused to re-evaluate their tax positions before returning to the market with greater clarity and confidence. In many cases, it took these investors six to nine months to work through the implications of the bill to their tax capacity and risk tolerance. We expect a similar pattern here: many buyers are likely to re-enter the market throughout 2026, with the extent of that re-engagement becoming clearer during the first quarter of 2026 as tax positions and forecasts firm up.
Looking ahead to 2026, what are the most prepared tax teams doing now to position themselves for success?
Clark Conlisk (Principal): Prepared teams are using this adjustment period productively. They’re engaging early in the calendar year to evaluate opportunities thoughtfully and access a broader set of credits before the market compresses. The first two quarters typically offer the greatest supply of credits for the respective tax year, so early engagement often translates into greater choice, cleaner execution, and more attractive pricing.
At the same time, those teams are formalizing investment policies that define acceptable credit types, deal sizes, insurance posture, payment timing, and approval authority. That preparation reduces friction when transactions move forward.
Stephanie Deterding (Managing Director): Prepared teams are aware of the risk of waiting too long. To the earlier point on credit availability, we typically see a significant drop-off of available credits for the previous tax year in the first quarter. If you are in a position where you are seeking credits from the previous year, we would recommend beginning your search for tax credits as early as possible. Crux can help you identify high-quality credits that meet your investment needs.
Given that transactions can take 6–12 weeks (possibly longer for first-time buyers), teams should align internal approvals, engage advisors early, and be prepared to move when opportunities arise. The earlier you complete a transaction, the greater the benefits and economics, and the less scrambling as tax-filing deadlines approach.
Brandon Schneider (Principal): The most prepared tax teams are not just doing one-off transactions — they are working against a long-term strategic plan. Those teams have created a dynamic forecast of their tax liability over the next three to five years that incorporates different scenarios. They have also engaged with market intelligence to align senior leaders on a tax credit strategy. To execute on that strategy, they are partnering with advisors like Crux that can provide broad access to transactions that fit their strategy and can streamline the diligence process.
The leaders in this space know exactly what their buy box is and are ready to move quickly when the right opportunity presents itself.
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How are buyers approaching portfolio construction across multiple credit types and vintage years? What strategies are working well?
Ted Lee (Principal): Sophisticated buyers are moving beyond evaluating individual transactions toward programmatic approaches that manage concentration risk and streamline tax planning. There are a number of tools available to achieve those goals across the portfolio.
On the diversification front, we have seen buyers conduct multiple transactions to diversify counterparties and manage other risks. Other buyers are balancing exposure to more traditional technologies with emerging opportunities such as advanced manufacturing and fuels credits.
Many buyers are also taking advantage of the ability to carry the transferable tax credits back up to 3 years and forward up to 22 years. This approach allows flexibility in tax planning and allows buyers to take advantage of market conditions for different tax credit vintage years as they shift over time.
Buyers are also evaluating investments in tax equity and hybrid structures, often alongside tax credit transfers. This approach provides access to additional tax benefits from depreciation and cash flow from the proceeds of the project, while also giving the option to add transfers to optimize the overall tax structure.
Clark Conlisk (Principal): The most effective strategies treat tax equity and transferable tax credits as complementary tools, not substitutes. Tax equity investments — whether through funds or direct project-level as participation — often generate attractive after-tax returns and long-term exposure to ITCs and PTCs, but they’re inherently less flexible. Capital is committed early, structures are more bespoke, and timing is driven by project development.
Transferable tax credits provide the counterbalance. They allow tax teams to top off annual tax capacity, respond to changes in taxable income, and fine-tune outcomes once the year is in view — particularly valuable in environments such as 2025, where accelerated expensing under Section 174A and bonus depreciation made forecasting more complex for some tax departments.
The highest-value portfolios combine a core allocation to tax equity and a flexible layer of transferable credit purchases that can be adjusted year-to-year.
Crux supports both sides of that equation, helping tax teams understand risk, return, and accounting implications across structures while providing access to a diversified pipeline of transferable credits. When done well, this approach converts a predictable tax expense into a repeatable source of economic value.
What separates the most successful tax credit buyers from the rest?
Stephanie Deterding (Managing Director): Process discipline. Successful buyers have clear policies, align stakeholders early, and run diligence, documentation, and — where relevant — insurance decisions in parallel. That operational maturity makes them reliable counterparties and positions them to move efficiently when opportunities align. For newer participants, enlisting the support of a party like Crux early, such that opportunity selection can be informed by preliminary diligence from experienced tax equity and tax credit professionals, will help to secure this advantage.
Grace Chan (Senior Manager): Successful buyers treat tax credits as a strategic finance function, not just a one-off transaction. Executing on that approach requires market intelligence, speed, and broad access to credits. Successful buyers are following market trends so they can benchmark their transactions. They also have a clear understanding of their organization’s “buy box” — including the company’s risk tolerance — and have an established decision-making process so they are ready to move quickly when the opportunity arises. And they are partnering with advisors that can provide access to a wide range of opportunities.
How should buyers be thinking about potential policy changes or Treasury guidance updates in their 2026 planning?
Ted Lee (Principal): The biggest change to the market will be additional guidance on the prohibited foreign entity and material assistance rules. Those rules will ultimately impact many of the credits, but the advanced manufacturing credits will be the tip of the spear because there’s no safe harbor period. I would also expect additional guidance on other parts of the market such as biofuels and nuclear.
Buyers will need to ensure that their advisors are well-prepared for these changes. That said, policy change can create both risks and opportunities: buyers that work with expert advisors like Crux to get comfortable with market developments may gain a competitive edge. For many buyers, full-service advisory with expertise across capital markets, policy, and tax will be key.
What advice would you give to a corporate tax team building their transferable tax credit strategy for the next one to three years?
Stephanie Deterding (Managing Director): Tax credit investing is now standard operating procedure for tax and finance leaders. Corporate tax teams that aren’t already building this capability today are at risk of falling behind, so the question isn’t whether to engage but how quickly your team can capture value.
Teams that are new to the market this year should focus on educating themselves about the opportunity and testing the market with some simple deals. Once the team has a deal or two under their belt, it’s easier to make the mindset shift from a one-off transaction to an ongoing program that embraces the full set of credits and investing opportunities (such as tax equity).
Brandon Schneider (Principal): Treat transferable tax credits as a recurring tax-planning tool, not a one-off transaction. Longer commitments from buyers can result in even higher tax savings, making these tax credits a powerful tool for long-term tax planning.
While there is an upfront education process, after executing your first transaction and establishing trusted advisors and partners to work with, finding a tax credit transaction should feel like a smooth, low-risk process. This means developing a clear framework for credit selection, risk tolerance, internal approvals, and counterparty standards. Over time, this reduces execution risk, improves pricing, and allows teams to act decisively as opportunities arise.
Disclaimer: This post is for informational purposes only and should not be construed as tax, legal, or accounting advice. Crux does not provide tax or legal advice. You should consult with your own tax, legal, and accounting advisors before engaging in any transaction or strategy discussed herein.
