Solar Financing Tax Equity Structures: Sale-Leasebacks, Inverted Leases and Partnership Flips

Choosing the Right Structure, Weighing Advantages and Drawbacks of Various Structures

Recording of a 90-minute CLE/CPE webinar with Q&A

Conducted on Tuesday, August 15, 2017

Recorded event now available

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Program Materials

This CLE webinar will discuss solar financing tax equity structures—sale-leasebacks, inverted leases and partnership flips—and the advantages and disadvantages of each from a legal, business, financial and tax perspective. The panel will examine current trends and issues in solar financings.


The main tax equity structures in solar energy deals are sale-leasebacks, inverted leases and partnership flips with some variations therein. There are a variety of business, financial and tax reasons for selecting one of the three structures. Equity investor preference is driven by many factors, including risk allocation, cash exposure, cost of capital and term of project.

An internal IRS memo states that guidelines it issued in 2007 for partnership flip deals do not apply to such transactions in the solar market. Uncertainty on how the IRS will treat inverted leases creates greater tax risks. The tax treatment and ramifications are a major driver of choosing a preferred structure.

Availability of investment tax credits is also driving solar deal flow as solar energy projects must be in service by December 2020 to qualify for the 30% investment tax credit.

Listen as our authoritative panel discusses the pros and cons of sale-leasebacks, inverted leases, and partnership flip tax equity structures. They will explain the legal, business, financial and tax reasons driving the choice of structure and will discuss trends in solar financing as well as the investment tax credit.



  1. Current state of the solar finance market and trends for the near future
  2. Choosing the appropriate tax equity structure
    1. Sale-leaseback
    2. Inverted lease
    3. Partnership flip
  3. Evaluating the tax risks
  4. Current issues in deals


The panel will review these and other key issues:

  • What are the differences among the sale-leaseback, inverted lease and partnership flip types of tax equity structures?
  • What are the pros and cons of each of the basic tax equity structures?
  • What factors drive equity investor preference for a particular type of structure?
  • What tax issues are currently taking up the most time in deals?


Martin, Keith
Keith Martin

Norton Rose Fulbright US

Mr. Martin is a transactional lawyer whose principal areas of practice are tax and project finance. He acted for 178...  |  Read More

Medina, Jorge
Jorge Medina
Associate General Counsel, Tax

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