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

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

Note: CPE credit is not offered on this program

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

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Conducted on Thursday, June 4, 2020

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Course Materials

This CLE course 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.


There are three main tax equity structures in use currently for financing solar energy deals: sale-leasebacks, inverted leases, and partnership flips. There are also several variations on these basic structures.

The U.S. Court of Federal Claims in the companion cases of Bishop Hill Energy LLC and California Ridge Wind Energy LLC, found in favor of the government and denied a Section 1603 grant reimbursement for the taxpayer, a renewable energy developer. The court held that while developer fees are includible in cost basis and eligible for the Section 1603 grant, the court was not convinced that the developer fees in these cases were adequately substantiated.

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 noteworthy issues:

  • When to choose one structure over another
  • What are the main issues on which the parties spend the most time in negotiations?
  • How are the Bishop Hill and California Ridge cases impacting how deals are structured?
  • What is the current market on such things as construction-start strategies, developer fees, basis step-ups, change-in-law risk, flip yields, DROs, tax insurance, unwinds, and withdrawal rights?


Medina, Jorge
Jorge Medina

Pillsbury Winthrop Shaw Pittman

Mr. Medina’s practice focuses on tax aspects of energy investment and financing transactions, including tax...  |  Read More

Martin, Keith
Keith Martin

Co-Head of Projects
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

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