On June 29, 2021, the US Internal Revenue Service (the “IRS”) released Notice 2021-41, extending and enhancing previous relief given by the IRS pursuant to Notice 2020-41 on the start-of-construction rules for the production tax credit and energy investment tax credit. The new notice extends the continuity safe harbor for projects that began construction in calendar years 2016 through 2020 and relaxes the continuity requirement for projects that do not satisfy the continuity safe harbor.
Continue Reading IRS Extends Start-of-Construction Relief for Renewables in Light of Continuing Effects of COVID-19
SEIA Asks for Extension to Continuity Safe Harbor
In an April 12, 2021 letter to Treasury Secretary Yellen, the Solar Energy Industries Association (SEIA) has asked for an extension of the so-called “continuity safe harbor” under the beginning of construction rules under IRS Notice 2018-59.
Continue Reading SEIA Asks for Extension to Continuity Safe Harbor
IRS Offshore Wind Guidance is Officially Published with a Material Tweak
On December 31, 2020, the IRS released Notice 2021-05 (the “Notice”) on its website, in advance of its official publication. As discussed in our earlier blog post, the Notice provides favorable guidance for offshore renewable energy projects (“Offshore Projects”) and renewable projects constructed on federal land (“Federal Land Projects”) and generally allows these
IRS Grants Beginning of Construction Relief for Offshore Renewable Projects and Renewable Projects on Federal Land
On December 31, 2020, the US Treasury Department and the Internal Revenue Service (the “IRS”) issued Notice 2021-05 (the “Notice”), which provides relief for offshore renewable energy projects and renewable projects constructed on federal land. Specifically, the Notice allows the Continuity Safe Harbor to be satisfied for projects constructed offshore or on federal land if
IRS Provides Start-of-Construction Relief for Renewables in Light of COVID-19
On May 27, 2020, the US Internal Revenue Service (the “IRS”) released Notice 2020-41 (the “Notice”), updating the IRS guidance on the start-of-construction rules for the production tax credit (“PTC”) and energy investment tax credit (“ITC”) by extending the continuity safe harbor for projects that began construction in either calendar year 2016 or 2017.1 Additionally, the Notice provides relief under the so-called 3 ½ month rule where payments were made on or after September 16, 2019, but the services or property were not expected to be provided until 2020, as long as they are actually received by October 15, 2020.
Continue Reading IRS Provides Start-of-Construction Relief for Renewables in Light of COVID-19
Treasury to Extend Continuity Safe Harbor
The U.S. Department of Treasury plans to modify the rules regarding the continuity safe harbor for the start-of-construction rules under Treasury guidance for the production tax credit (PTC) and energy investment tax credit (ITC). This plan was announced today, May 7, 2020, in a letter from Frederick W. Vaughan, Principal Deputy Assistant Secretary, Office of
Infocast’s Wind Finance & Investment Summit Soundbites
Below are soundbites from panelists who spoke at Infocast’s Wind Finance & Investment Summit on February 6 and 7 in Carlsbad, CA. The attendance at the event appeared strong, and the mood was generally optimistic.
Despite the title of the conference being wind, many of the panelists touched on solar and storage, so readers who do not work in the wind industry may nonetheless find some points of interest below.
The soundbites are edited for clarity and are organized by topic, rather than in chronological order. They were prepared without the benefit of a transcript or recording.
Topics covered below include the tax equity market, the 2020 soft deadline for the full production tax credit (“PTC”), the impact of the PTC phase out, PG&E’s bankruptcy, storage and more.
State of the Tax Equity Market
“There was $12 billion of combined wind and solar tax equity investment in 2018. This up from $10 billion of tax equity investment in 2017; however, the actual new volume was down in 2018 as $3 billion of the $12 billion in 2018 was secondary market transactions” (i.e., one tax equity investor selling down to another tax equity investor). Managing Director, Money Center Bank
“Tax equity has done well in terms of how it has worked out for the banks that invested in it.” Tax Equity Head, Corporate Investor
Continue Reading Infocast’s Wind Finance & Investment Summit Soundbites
Tax Equity Presentation to the Energy Subcommittee of the Equipment Leasing and Finance Association
Here’s a presentation that Joseph Sebik, CPA of Siemens Financial Services and I gave to the Energy Subcommittee of the Equipment Leasing and Finance Association on January 22: Tax Equity Energy Subcommittee 1-22-19 of ELFA.
Despite being to a leasing trade association, the focus of the presentation is the partnership flip structure. The presentation
Strafford live webinar: “Tax Reform & Renewable Energy: Planning Techniques” on January 16
I am pleased to announce that I will be speaking in an upcoming Strafford live webinar, “Tax Reform and Renewable Energy: Planning Techniques, 100% Expensing, BEAT, Tax Credits and Interest Deduction Limitations” scheduled for Wednesday, January 16, 1:00 pm-2:30 pm Eastern.
As a reader of this blog, you are eligible to attend this
Solar Power International 2018: Soundbites
Below are soundbites from panel discussions at Solar Power International on September 25 and 26 in Anaheim, California. Overall the conference was well-attended and the panelists and audience seemed optimistic regarding current and future opportunities.
The soundbites are organized by topic, rather than presented chronologically. The soundbites were prepared without the benefit of a recording or a transcript and have been edited for clarity.
Topics covered include tax equity, the solar start of construction rules, the investment tax credit (“ITC”) and tax basis risk after the Federal Circuit’s opinion in Alta Wind, the inverted lease structure, back-leverage debt, storage, community solar and merchant projects.
Macroeconomic Factors for Solar and Tax Equity
“Rising corporate profits have caused more tax equity to enter the market. That has shifted the negotiating leverage to the sponsors.” Managing Director, Money Center Bank
“Tax equity always needs to fund around 40 percent of the capital stack in order to use the tax benefits efficiently.” Managing Director, Money Center Bank “Equipment costs continue to come down. Module prices are back to where they were before the tariffs at 30 to 40 cents a Watt.” President, Diversified Solar Services Company
“There are greater economies of scale for utility scale solar than for residential or C&I. As module prices drop faster than that customer acquisition costs, utility scale will become a larger portion of the market.” President, Diversified Solar Services Company
“I am very bullish on next year. This has been the best year ever from a volume perspective, not from an income perspective, because the market is causing us to charge less.” Managing Director, Regional Bank
“Falling electricity prices aren’t leading to sponsors raising less capital, because sponsors have been beating down lenders and service providers.” Managing Director, Regional Bank
“Capital providers are taking more risk for less return.” Managing Director, Regional Bank
“Residential solar debt has become an accepted asset class.” Managing Director, Regional Bank
“Soft costs, such as marketing, legal, accounting and tax advice, are five to seven percent of a solar project’s cost in Europe and Asia; they are 35 percent of solar project’s cost here; we need to attack that.” President, Solar Developer
Continue Reading Solar Power International 2018: Soundbites