Renewable Energy Tax Credits
Discover financial incentives by adding a renewable energy tax credit component to your project.
As the use of renewable energy has become mainstream in the United States, Brian Wishneff & Associates is on the forefront of assisting projects obtain and monetize the various financial incentives that are available from renewable energy projects.
Currently, the federal government as well as numerous state governments have a myriad of financial incentives to encourage the installation of renewable energy infrastructure. These incentives may include tax credits, rebate programs, grants, and other types of financial benefits.
Federal Renewable Energy Tax Credits:
There are several different renewable energy tax credits at the Federal level. The most common tax credit is the investment tax credit (ITC) related to solar installations. The solar ITC equals 30% of the investment made in eligible property. Other energy sources that may be eligible for tax credits include combination heat and power systems, wind microturbines, biogas and geothermal. Under current legislation, the ITC is scheduled to begin to be reduced to smaller percentages for projects that were not commenced by December 31, 2019.
The solar ITC can be monetized by project sponsors in a similar manner to other Federal tax credits, i.e. they can be allocated to an investor who makes a capital contribution to help facilitate an eligible project. However, there are several different legal structures that will typically be utilized to facilitate the syndication of solar ITCs. The preferred structure will depend on a variety of factors including project sponsor preference, state or local regulatory requirements and investor preferences.
BW&A has helped a wide variety of renewable energy projects monetize their ITCs. With this experience BW&A has developed a number of creative solutions to facilitate these transactions and maximize the benefit from the use of ITCs. This work includes developing strategies to aggregate numerous small systems into a single investment vehicle.
Triple Bottom Line
The further combination of renewable energy and energy conservation components in historic renovation or other real estate projects represents yet additional opportunities and can help project sponsors truly achieve a triple bottom line. This integration of economic, social and environmental considerations can allow projects to create a benefit above and beyond the common monetary considerations.