How Transferable Energy Tax Credits Impact Private Equity

With the passage of the Inflation Reduction Act (IRA), certain renewable energy tax credits can now be transferred or sold by those generating eligible tax credits to qualified buyers, including private equity investors, seeking to purchase tax credits. Transferable energy tax credits provide a new and more efficient way for taxpayers to monetize these tax credits alongside tax equity structures, while providing a significant tax planning opportunity for private equity funds and their portfolio companies.  

In this episode of The Drawdown, Chris Truitt, Partner and Transaction Tax Services Leader, welcomes Marty Karamon, Partner and Tax Credits & Incentives Advisory Leader, Will Billips, Tax Services Partner, Tim Doran, Tax Credits & Incentives Advisory Director, and David Mohimani, Tax Credits & Incentives Advisory Manager. Together, they discuss deal structuring alternatives for transferable energy tax credits and how the new rules are impacting the private equity industry.

Related Guidance 

• Article: IRS Announces Notice 2024-36 and Round Two of Section 48C Allocations Timetable
• Webinar: The Developing Market for the Purchase and Sale of Clean Energy Tax Credits
• Webinar: Navigating the Impact: Inflation Reduction Act of 2022 Update
• Article: Factors to Consider When Seeking Cost Segregation and Section 179D Study Service Providers