The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Bright Future for Renewable Energy Subsidies

"Renewable energy subsidies will be able to survive tax reform," said Mike Novogradac founder of the boutique tax credit accounting firm during the opening session of the sixth annual Novogradac Financing Renewable Energy Conference in San Francisco April 24th and 25th.

Novogradac was commenting on the uncertainty surrounding the future of the Production Tax Credit (PTC) for wind that will expire at the end of 2013 in the context of corporate tax reform and the planned reduction of tax expenditures.

“Corporate tax reform will most likely be introduced in 2014 at the earliest,” said Keith Martin, partner at Chadbourne & Parke and lobbyist to Congress and Treasury. He went on to say, “Wind industry lobbyists are optimistic they will get another extension.”

Financing Structures Continue to Evolve, Corporate Investors Get in the Game

Faced with a shortage of tax equity in the post-1603 landscape, the solar energy industry been forced to evolve in a Darwinian effort for survival in what is still a nascent industry. “Lack of new investors is a limiting factor,” said Albert Luu, VP of Structured Finance at Solar City.

The viability of emerging financial solutions for solar and other renewables was a hot topic among panelists. REITs, MLPs and securitization were among the new structures discussed. Determination on a Private Letter Ruling (PLR) to the IRS on solar energy for REITs as an eligible asset class is pending. U.S. Senator Chris Coons of Delaware has introduced legislation that would expand eligibility of MLP financing beyond fossil fuels to renewables by revising the tax code. Martin thought the proposal, “faced long odds” and questioned “how many additional industries Congress will allow to operate without paying corporate income tax.” 

But new financing structures for solar and other renewables won’t happen overnight.

NREL has established a working group, Solar Access to Public Capital (SAPC), to advance solar securitization and attract new investors. But, “because rating agencies need five years of historical project data, securitization may be delayed until 2014 or beyond,” commented Jonathan Baker of Deutsche Bank. And panelists agreed that the favorable tax treatment of MLPs and REITs may conflict with recapture rules under existing tax structures, like the ITC in revising the tax code.

Corporate investors are also slowly increasing their appetite for tax equity on solar deals to supplement traditional TE thanks to efforts by Solar City and Sol Systems.  Albert Luu and Sol Systems founder Yuri Horwitz, both panelists at the conference, agree that “lack of new investors is a limiting factor” and that the going is slow, requiring “eight to twelve months to shepherd new  investors through the process and educate them on tax structures and the new solar asset class.”

Sometimes though, the hard work pays off. Solar City closed a $65 million tax equity fund with Honda earlier this year. 

Lead image: Dawn via Shutterstock

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



SolarCity Lays Claim to ‘World’s Most Efficient Rooftop Solar Panel’

Jennifer Delony SolarCity in an Oct. 2 announcement said that it will begin production this month on what the company claims is the “...

Global Forecast: Solar Installation Capacity To Top 57 GW in 2015

Renewable Energy World Editors Solar installations globally could grow by between 25 percent and 30 percent in 2015 compared to last year, according...
solar power

APS Requesting Proposals for New Large-scale Solar Power Plant

PennEnergy Editors Arizona Public Service (APS) on Oct. 1 announced it is issuing a request for proposals (RFP) to test the market for n...


US Solar Institute Chosen for Military Solar Training at Patrick Air Force Base

In August 2015, the Air Force chose The US Solar Institute (USSI) for a specialized sol...

Solar Power World Ranks Florida Solar One a Top 400 Solar Installer

Florida Solar One, a Miami Fort Lauderdale solar contractor is ranked among the top sol...

AWS Truepower Makes Wind Project Design More Effective with Less Effort with New Openwind® Version

AWS Truepower, LLC, an international leader in renewable energy consulting and informat...

Niner Wine Estates Powers 100 Percent of Winery Operations with REC Solar

The 388 KW solar system installed by REC Solar will pay for itself in approximately fiv...


Clean Energy Collective to use First Solar Panels in Community Solar

Today (Oct. 13) First Solar and Clean Energy Collective (CEC) announced a new partnership today under which First Sol...

Geothermal Visual: GEA, Clean Energy Organizations Tell Congress: We Need Tax Extenders 'As Soon As Possible'

In a letter dated Oct. 5, over 580 signatories representing clean energy industries, including Geothermal Energy Asso...

It's All About The Why

Why do people buy your product or service? This is a question that you should keep in your mind at all times and remi...


Chris Cather is founder of bluecrab solar, a commercial developer and industry advocate based in Annapolis, Maryland. He is currently evangelizing innovative new sources of financing in the solar energy industry by frequently contributing to the o...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Applying Renewable Energy - Online Training

RENAC Online offers a selection of courses on a wide variety of renewabl...

Certified Renewable Energy Project Developer - online training

In this online training, participants learn about the most critical para...

Certified PV Professional - online training

After completing this online training, participants will be able to unde...


Referral Engine

In the efficiency business, a successful referral can mean the differenc...

The Vice President Stole My Show (Not Really)

When I finished my Solar Power International (SPI) panel discussing what...

The Value Of The Building

If you’re selling efficiency solutions in the built environment, y...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now