Unicorn Solar sees the Inflation Reduction Act (IRA) as opening the door to innovative financing options, making deals even more attractive for investors:
● Tax Credit Bridge Loans: Developers can access liquidity by borrowing 70–75% of their anticipated tax credit revenues at an interest rate of 212.5 to 350 basis points above SOFR. These supportive bank programs may also lower the interest rate or increase the loan amount once a buyer comes forward.
● Hybrid Partnerships: Collaborations between tax equity investors and developers blend cash distributions with tax credit sales, maximizing returns while managing risk.
These models enable investors to be ready to explore creative deal structures that deliver more value.
· Overview: The Solar Investment Tax Credit (ITC) is a federal tax credit that allows businesses to claim 30% of the cost of a solar photovoltaic (PV) system on their corporate income taxes for the year in which the system is placed in service. ITC is designed to reduce the overall installation cost for solar projects in the U.S.
· Eligible Expenses: The Investment Tax Credit (ITC) is determined by multiplying the applicable tax credit percentage (ranging from 10% to 30%) by the “tax basis,” which represents the total investment in eligible property.
Eligible property includes the following:
● Solar PV panels, inverters, racking, balance-of-system equipment, and associated sales and use taxes on these items.
● Installation costs and associated indirect costs.
● Step-up transformers, circuit breakers, and surge arrestors.
● Energy storage devices, provided they are charged by a renewable energy system more than 75% of the time.
Unicorn Solar is interested in assisting you with our partner in getting you the tax credits and financing you deserve for your solar PV projects.
Blessings to you, your families, and your colleagues in the New Year.
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