Rush for US clean energy subsidies boosts brokers and lawyers
The Biden administration’s $370bn package of subsidies for clean energy is generating a surge of activity for consultants, lawyers and brokers, after allowing green tax credits to be sold on the open market for the first time.
Veterans of clean energy finance say the groundbreaking structure of the incentives in the Inflation Reduction Act could turn out to be as significant as their unprecedented size, bringing new sources of capital as well as a host of opportunities for middlemen.
Entrepreneurs are already exploring new products, including trading platforms for tax credits, to capitalise on the legislation.
The law gives developers of renewable energy projects and manufacturers new ways to get the value of tax credits upfront — a critical element, since projects typically do not make taxable profits for years.
Companies that do have tax liabilities they want to offset have been able to invest in “tax equity” partnerships with developers, but the deals represent complex, long-term commitments so the players have been limited to big banks and a few other groups.
“Tax equity favours certain kinds of project and certain kinds of investors, but we don’t need JPMorgan now to tell us we have a good project,” said John Gimigliano of KPMG’s national tax practice. “It is the democratisation of finance.”
This story originally appeared on: Financial Times - Author:Stephen Foley
