PE Investments in Renewable Energy Projects: Maximizing Available Tax Credits Using Innovative Structures (Part Two of Two)

In an attempt to stoke greater investment and innovation in the renewable energy sector, the federal government has offered various lucrative tax credits to project developers. There are special timing and structuring considerations, however, that parties need to weigh for optimizing the benefit of these tax credits, including commoditizing them for interested third parties. These are among the items discussed in a recent webinar sponsored by Strafford CLE Webinars and featuring Troutman Sanders partner Hayden S. Baker and Holland & Knight partner Marc S. Reisler. This second article in a two-part series analyzes the status of multiple applicable tax credits, as well as investment structures managers can pursue to benefit – directly or through monetization – from this tax treatment. The first article explained how managers are navigating regulations, development and competition in the renewable energy asset class to realize returns. For more tax and structuring considerations when investing in idiosyncratic assets, see our three-part series on PE real estate funds: “Structuring by Investor Type and Distinct Statutory Considerations” (Aug. 13, 2019); “Private REITs and Other Potential Investment Vehicles” (Aug. 27, 2019); and “Unique Fund Terms and Notable Tax Items” (Sep. 3, 2019).

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