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Using Inverted Leases to Finance Renewable Energy Projects

Evaluating Tax Risks, Navigating Structural Variations, Leveraging Pass-Through Election

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

This program is included with the Strafford CLE Pass. Click for more information.
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Conducted on Thursday, February 29, 2024

Recorded event now available

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This CLE course will guide counsel to parties involved in financing energy projects on using inverted lease tax equity structures. The panelist will dive into inverted leases and current issues in such transactions.


When using inverted leases, the renewable energy company assigns customer agreements to a tax equity investor who collects the customer revenue and pays most of it to the renewable company as rent. The energy company passes the investment tax credit to the tax equity investor but keeps the depreciation. The energy company takes the asset back when the lease is terminated.

Inverted leases provide several advantages, including lower exit costs, more efficient tax benefits, and no basis reduction. However, they also have some downsides, including a potentially higher tax structure risk.

The structure is used mainly for solar projects but can be used for any project on which investment tax credits will be claimed. There are two forms of inverted leases.

Listen as Gabrielle Jacques, Senior Associate at Norton Rose Fulbright, provides an in-depth discussion of inverted lease tax equity structures. The panel will discuss the business, financial, and tax reasons behind choosing such a structure, the different structural variations, and the tax risks involved.



  1. Current state of the solar finance market and trends for the near future
  2. Inverted leases
    1. How they work
    2. Basic lease terms
    3. Timing considerations
    4. What is "market" on allocation of tax risks
    5. Other current issues in deals
  3. Structure variations


The panelist will review the advantages and disadvantages of:

  • An inverted lease versus alternative tax equity structures
  • Different variations of inverted leases


Jacques, Gabrielle
Gabrielle Jacques

Senior Associate
Norton Rose Fulbright

Ms. Jacques is a senior associate in Norton Rose Fulbright's New York office. Gabrielle's practice...  |  Read More

Amelia Wessel, Harriet
Harriet Amelia Wessel

Norton Rose Fulbright US

Ms. Wessel is an associate in Norton Rose Fulbright's Houston office. Her practice focuses on federal and...  |  Read More

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