Renewable energy tax equity is a form of project financing. Tax equity investors commit a portion of the cash needed to develop a renewable energy project, and in return receive financial benefits, tax benefits and environmental benefits.
Established by Congress in 2006 and receiving sweeping bipartisan support in the Inflation Reduction Act of 2022, renewable energy tax equity offers corporate taxpayers:
Rapid return of capital as the Federal Investment Tax Credit (ITC) provides a dollar-for-dollar reduction in income taxes that a corporation would otherwise pay the federal government.
Accelerated depreciation for the majority of the cost of the solar assets, allowing investors to “keep” funds that would otherwise be paid to the IRS.
Material after-tax returns from tax savings and cash yield
Steady cash flows anchored in long-term, fixed-rate agreements with credit-worthy offtakers.
These benefits are quickly accessible post-investment and are largely unaffected by the actual energy output of the solar project.
The CSS team has closed over 50 tax credit funds and has placed more than $5.5 billion in tax equity projects. As a leading syndicator of renewable energy tax equity, we focus on driving optimal economic results while mitigating risks and minimizing the resources required by our clients with respect to diligence, document preparation, fund closing, accounting, and asset management.