Financing Renewable Energy and Carbon Reduction Projects Under the Inflation Reduction Act

Monetizing Energy-Related Tax Credits, Structuring Deals, Financing, "Direct Pay," Selling Credits to Third Parties Under the IRA

Note: CPE credit is not offered on this program

Recording of a 60-minute premium CLE video webinar with Q&A

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Conducted on Wednesday, June 7, 2023

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Course Materials

This CLE webinar will provide renewable energy counsel guidance on available options and tools for monetizing energy-related tax credits under the Inflation Reduction Act (IRA). The panel will discuss financing structures for renewable energy and carbon reduction projects, the concept of "direct pay" and the ability to sell credits to third parties for cash under the IRA, and other key considerations for developers to maximize financing for projects under the IRA.

Description

The IRA encompasses significant renewables and clean energy tax credits available to renewable energy developers, producers, and investors. Counsel must understand the requirements and challenges for monetizing energy-related tax credits under the IRA.

The IRA expands tax incentives for various renewable energy resources, reshapes how eligible renewable energy projects are financed, and monetizes new and expanded tax credits. The IRA includes (1) modifications to ITC, PTC, and carbon capture requirements and limitations; (2) the inclusion of a "direct pay" option for tax credits under certain circumstances; (3) the inclusion of a tax credit transfer regime; and (4) a variety of new energy tax credits.

The new "direct pay" election and tax credit transfer provisions of the IRA provide more flexibility to finance renewable energy and carbon reduction projects, which could provide alternatives to traditional tax equity structures.

Listen as our panel discusses new green energy tax incentives and requirements under the IRA, direct pay, the transfer of tax credits to third parties, and other key considerations for developers to maximize financing for projects under the IRA.

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Outline

  1. Overview of impact of the IRA on renewables
  2. New direct pay and credit transfer provisions
  3. Monetizing tax credits under the IRA
    1. Seller's perspective and challenges
    2. Buyer's limitations and considerations
  4. Financing structures, deal points, and pitfalls to avoid

Benefits

The panel will discuss these and other key issues:

  • Key energy-related provisions under the IRA
  • Inclusion of a "direct pay" option for carbon capture credit, PTC, and ITC
  • Transfers of tax credits to third parties
  • Financing structures in light of energy-related tax credits and requirements under the IRA
  • Key considerations and next steps for renewable energy developers, producers, and investors

Faculty

Cole, Jim
Jim Cole
Partner
Latham & Watkins

Mr. Cole practices transactional tax involving mergers, acquisitions, restructurings, and capital markets transactions....  |  Read More

Katz, Eli
Eli M. Katz
Partner
Latham & Watkins

Mr. Katz has extensive experience assisting clients on a wide range of complex transactions, including those in the...  |  Read More

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