Legislation in the US has made tax equity more accessible

May 1st, 2024 Newsletter

Legislation in the US has made tax equity more accessible. Tax equity financing has recently become more accessible, thanks to legislative changes like the Inflation Reduction Act. This shift has opened opportunities for more players in the market, beyond just major banks like JPMorgan and Bank of America. With the passage of the IRA on August 16, 2022, we’re seeing increased interest from investors looking to take advantage of transferability provisions. This means more potential funding sources for your solar projects. Its important to note that the transferability provision enables businesses to transfer “or a portion of any of” to a third party in exchange for tax-free cash. This provision offers businesses the opportunity to leverage tax incentives even if they lack the necessary tax liability to fully utilize the credits themselves. The utility solar-plus-storage sector is seeing strong demand for tax equity financing. Last year, the total volume of tax equity financing for renewable projects reached approximately $19 billion to $20 billion, with solar and wind projects receiving nearly equal shares. For solar projects specifically, tax equity typically makes up around 35% of the capital stack, while for wind projects, it’s closer to 65%.As solar developers, you’re likely interested in the rapid growth of the market driven by the monetization of clean energy tax attributes. In 2023, transaction volumes for tax credit transactions are estimated to be between $7 and $9 billion, indicating significant opportunities for investment. Transferable credits are becoming increasingly important, especially for smaller projects and emerging technologies. This flexibility levels the playing field and opens up financing options for projects with face values of $50 million or less.

Looking ahead, we cordially invite you to join us at RE+ Event in Houston, Texas, May 14-15th, at booth 911. This forum will give you the best environment for more in-depth talks, facilitating a profound understanding of your specific needs and exploring potential avenues for collaboration. Schedule your meeting!Product of the month!

Get a quote now!

Visit our websiteUnicorn Solar | Website ‌  ‌  ‌

Leave a Reply

Your email address will not be published. Required fields are marked *