We have published our whitepaper: Gain Deferral Using Qualified Opportunity Zone Investment Strategies Legal Update.  “Qualified Opportunity Zones” are not specific to renewable energy and do not involve tax credits but provide a powerful new tax benefits as a result of their enactment last year as part of the “Tax Cuts and Jobs Act.”

The whitepaper discusses Qualified Opportunity Zones generally.  Two aspects of them are of note to the renewable energy industry.  First, the statutory language appears to apply to ordinary and capital gains (the IRS may take a different view in its guidance).  The applicability to ordinary gains means that the Qualified Opportunity Zone rules could be used by developers to defer the tax gain they recognized on sales of projects to tax equity partnerships or lessors.

Second, the intersection of the Qualified Opportunity Zone rules and the partnership capital account rules requires clarification that we expect the IRS to provide in its guidance.  So the purchase by partnerships of solar projects in Qualified Opportunity Zones is a strategy that requires further guidance before the tax results can be certain.