Tax Considerations for Solar Energy Projects
1 hour 40 minutes
Gain an understanding of the tax benefits for solar projects and how to qualify for credits.
Solar project development in the United States is heavily subsidized by the U.S. federal government. These subsidies are mostly in the form of tax credits and other incentives within the tax code. In order to successfully maximize the value of a solar project, developers and other interested parties must understand the structure of these tax incentives and techniques utilized in the industry to monetize the tax credits known as tax equity. This topic will provide an overview of the federal tax incentives available for solar projects in the United States, as well as an introduction to the tax equity structures most commonly utilized to efficiently monetize the solar tax incentives. In addition to understanding common market structures and terms, this material will provide an overview of valuation for solar projects, explain why valuation is so important for solar tax equity, and provide insight on traps for the unwary with respect to project valuation. This information is critical for project developers and tax equity investors so they can ensure that their projects receive efficient tax equity that maximizes the available tax incentives.
• You will be able to discuss the tax incentives available for solar projects and why tax equity is important for project viability.
• You will be able to explain the basic framework and economics of a partnership flip structure.
• You will be able to identify the common partnership structures utilized for tax equity transactions and the key levers on each.
• You will be able to recognize the pressure points in appraisals for solar projects and the interaction with tax equity structures.