Renewable Energy & Storage Project Tax Structuring and Strategies

Tax Equity Structuring and Strategies for Renewable Energy & Storage Projects

Updated to Reflect Changes Effected by Recent Legislation and IRS Rulings

June 28-29, 2022 | Online :: Central Time

“Very informative and a go-to presentation for renewable energy tax structuring.” Member, Moore & Van Allen PLLC

“The course content is quite useful as it’s on the point and covered all the relevant topics. The speakers did a wonderful job – touching on the basics as needed and delving deep as it progressed. Highly recommend it!” Associate Vice President, Project Finance Advisory Limited

“A course with enough detail and complexity for subject matter experts, but also clear enough for folks new to the issues.” Vice President and Corporate Counsel, Sky Renewable Energy Ltd.

Maximizing the benefits of tax incentives is vital in any renewable energy (and, now, storage) transaction.  Whether a project “pencils out” generally turns on the efficient use of these incentives.   How soon investors can get their desired return and exit the project, how much a project developer receives – and when – depends greatly on how the tax incentives are deployed.

Indeed, the relevant rules are highly technical.  This often means that parties involved in the acquisition and disposition of renewable energy assets depend on the structuring advice of experts, whose guidance about deal structures and strategies can be buried beneath layers of jargon and arcane tax references.  Worse, some investors, users, developers, and their advisers may “go it alone” and fail to attend to important aspects, leaving money on the table or putting their ventures at the risk of IRS challenges.

This course, therefore, is designed to give investors, developers, lenders, asset owners, utilities and their advisers an in-depth understanding of the tax issues involved in the development and structure of renewable energy projects.  It will also consider some of the significant concepts already adopted and still under discussion by legislative and executive branches of the federal government.

Learning Outcomes

The course content will:

  • Review the existing incentives for renewable energy and discuss how the tax incentives for renewables investment has been influenced by the Biden administration and Congress
  • Discuss in depth the various rules for partnerships and leasing structures
  • Explain how to optimize the financial accounting aspects of renewables
  • Describe the use of new markets tax credits
  • Review case studies using economic modeling analysis
  • Discuss with experienced developers, lenders and investors the issues they confront in their projects
  • Examine how to present financial documents to achieve the greatest “bankability”

    Agenda

    Tuesday, June 28, 2022 : Central Time

    8:30 – 9:00 a.m.
    Log In

    9:00 – 9:15 a.m.
    Welcome, Overview and Introductions

    12:45 – 1:30 p.m.
    Lunch Break

    9:00 a.m. – 5:00 p.m.
    Course Timing

    9:15 – 10:30 a.m. :: Who the Parties are and Their Roles

    • Sponsor/ Project Developer
    • Lender
    • Tax equity investor

    Overview of Tax Incentives for Renewable Energy

    • Refresher on the basics – credits, grants, and depreciation
    • The Production Tax Credit (PTC) – Section 45 / sales of electricity to third parties
    • The Investment Tax Credit (ITC) – Section 48 / based on cost of the facility
    • Recent extension of PTC and ITC, with relevant changes
    • MACRS and bonus depreciation

    10:30 – 10:45 a.m. :: Morning Break

    10:45 – 11:30 a.m. :: Survey of Transaction Structures

    • Flip
    • Sale Leaseback
    • Lease Pass-through (Inverted)

    11:30 a.m. – 12:45 p.m. :: Solar “Flip” Financial Model Review

    12:45 – 1:30 p.m. :: Lunch Break

    1:30 – 2:45 p.m. :: Tax Elements and Characteristics

    • Partnerships, LLCs and the conduit theory
    • “Allocations” of income, loss, tax credits vs. “Distributions” of income
    • Partner in a partnership, economic substance & profit motive
    • Capital accounts – Basic
    • Calculating minimum gain
    • Debt
    • Capital accounts – Advanced
      • Minimum gain’s impact on capital accounts
      • Deficit restoration obligations (DROs)
        • Step ups from distributions in excess of basis Leases vs. loans/467 loans vs. service contracts
    • Prepayments of electricity and PPA tax issues

    2:45 – 3:00 p.m. :: Afternoon Break

    3:00 – 4:15 p.m. :: Tax Elements and Characteristics (cont’d)

    • Preserving tax credit eligibility and commencing construction
      • Physical work of a significant nature
      • 5% Safe Harbor
    • Selling projects
      • NTP, MC, post PIS
      • Related party fees

    4:15 – 5:00 p.m. :: Lender – Investor Engagement Interparty Agreements

    • Partnership flip parties’ transaction positions
    • Inverted lease parties’ transaction positions
    • What every tax credit investor wants to avoid
    • Lender recourse remedies

    5:00 p.m. :: Program Adjourns for Day

    Wednesday, June 29, 2021 : Central Time

    8:45 – 9:00 a.m.
    Log In

    12:30 – 1:15 p.m.
    Lunch Break

    9:00 a.m. – 5:00 p.m.
    Course Timing

    9:00 – 10:00 a.m. :: Wind Financial Model Review

     

    10:00 – 10:45 a.m. :: GAAP, HLBV, Consolidation & Accounting for Tax Credits

    • Accounting for Renewable Energy Investments (GAAP)

     10:45 – 11:00 a.m. :: Morning Break

    11:00 a.m. – 12:30 p.m. :: Complex Tax Issues

    • Utilizing tax benefits
      • Passive activity rules
      • At-risk rules
      • Suspended losses, carry-forwards and carry-backs
    • Tax exempt use property
      • Leases
      • Ownership
    • Battery Storage
      • 70% test and ITC eligibility
    • Repowering projects
      • Used vs. new property analysis
    • State and local tax issues
      • Property tax exemptions
      • Non-resident withholding
    • Exit Strategies
      • Calls vs puts
      • Income character (long term gain vs. ordinary income)

    12:30 – 1:15 p.m. :: Lunch Break

    1:15 – 2:15 p.m. :: Detailed Review of Typical Lease Pass-Through Financial Model

     

    2:15 – 3:30 p.m. :: Renewable Energy Financing Outlook through the Lens of Washington DC / Open Forum

    • Recently enacted and pending legislative measures relating to renewables
    • Current “thinking” in Washington
    • Likely impacts on tax equity, renewable energy financing mechanisms and strategies such as
      • Direct pay alternative to tax credits option
      • Normalization
      • Availability of PTC for solar projects

    3:30 – 3:45 p.m. :: Afternoon Break

    3:45 – 5:00 p.m. :: Tax Equity “Best Practices” Panel / Open Forum

    The roundtable-format panel will focus on the practical problems confronted by developers and other industry participants in maximizing the efficiency of monetizing tax incentives in structuring and financing renewable energy projects.  It will also discuss aspects of how to assemble a team of deal experts.  And the SMEs will consider externalities influencing the tax equity landscape, such as supply chain challenges, inflation impacts, contract re-negotiations and the like.

    5:00 p.m. :: Program Adjourns

    Instructors


    Thomas Boman, Partner, Novogradac & Company LLP

    Thomas Boman is a partner in the St. Louis office of Novogradac & Company LLP. He joined the St. Louis office in 2013 as a tax partner. Before joining the firm, he served as a senior vice president of tax for a private equity firm in St. Louis. He has more than 30 years of experience as a tax consultant to a variety of companies with a focus on pass-through entities. Mr. Boman has significant experience with the new markets tax credit (NMTC) at both the federal and state levels. He also worked for 17 years in public accounting, primarily with the Big Four firms. He participates in the Partnership and LLC Committee of the American Bar Association and is a member of the American Bar Association, the American Institute of Certified Public Accountants and the Missouri Society of Certified Public Accountants. He has juris doctor and master of business taxation degrees from the University of Minnesota. Mr. Boman served as an adjunct instructor at the law school at Washington University in St. Louis, where he taught federal partnership taxation for 16 years.


    James F. Duffy, Partner, Nixon Peabody LLP

    James F. Duffy is a partner in the Boston office of the national law firm, Nixon Peabody LLP.  He serves as the Co-Chair of the firm’s Renewable Energy Tax Credit Team and concentrates his practice on structuring and closing transactions involving federal income tax credits and other significant federal and state income tax incentives, including Production Tax Credits and Investment Tax Credits for renewable energy.  His practice also covers New Markets Tax Credits.  Mr. Duffy has represented numerous developers, investors, syndicators and lenders in structuring and closing renewable energy and other transactions.  He serves on the Board of Directors and is the Secretary of the Distributed Wind Energy Association (DWEA), as well as the Board of Directors of Windustry.  He is a graduate of the University of Rhode Island, B.A. and The Harvard Law School.


    Tony Grappone, Partner, Novogradac & Company LLP

    Tony Grappone is a partner in the Boston, Mass., office of Novogradac & Company LLP, where he specializes in providing accounting, tax, and consulting services to developers, syndicators, and investors of projects that qualify for the low-income housing tax credit, historic tax credit, new markets tax credit, and renewable energy tax credit.  He serves as a technical editor of the firm’s Renewable Energy Tax Credit Handbook. Prior to joining Novogradac & Company LLP, Mr. Grappone worked at Ernst & Young LLP, specializing in partnership taxation within the affordable housing industry, servicing many of the nation’s largest tax credit syndicators and investors.  In addition, he served several leading venture capital firms as well as commercial real estate developers and investors. Mr. Grappone serves as a member on the Northeastern University Undergraduate Accounting Group Advisory Board.


    Michael Kuhn, Senior Vice President, Cambridge Savings Bank

    Michael Kuhn is Senior Vice President and Team Leader in Commercial Lending at Cambridge Savings Bank. In that role, he facilitates JAS’s CSB’s position in the solar financing market. He has been with Cambridge Savings for almost 13 years and previously worked for Rockland Trust Company and the Federal Reserve Bank of Philadelphia.


    Peter Lawrence, Director of Public Policy & Government Relations, Novogradac & Company LLP

    Peter Lawrence is Director of Public Policy & Government Relations for Novogradac & Company LLP. In this role, he coordinates the firm’s public policy and government relations work on low-income housing tax credit (LIHTC), the new markets tax credit (NMTC), the historic rehabilitation tax credit (HTC), renewable energy tax credits, and U.S. Housing & Urban Development programs. Prior to joining Novogradac & Company, Mr. Lawrence was the senior director of public policy and government affairs for Enterprise Community Partners where he led the execution of Enterprise’s policy and advocacy agenda.  He also was a housing policy analyst for the Center on Budget Policies and Priorities, where he worked on the Section 8 Housing Choice Voucher Program, a congressional fellow for Sen. Jack Reed of Rhode Island in his capacity as the Ranking Member of the Senate Housing and Transportation Subcommittee, and a presidential management fellow for the Office of Policy Development & Research at the U.S. Department of Housing & Urban Development.


    Forrest Milder, Partner – Boston Office, Nixon Peabody LLP

    Forrest Milder is a partner in the Boston office of Nixon Peabody LLP.  He has more than 30 years’ experience in the tax aspects of project finance, particularly renewable energy (including solar, wind, geothermal, and biofuels), housing, historic rehabilitations, and new markets, as well as many other related fields, including partnerships and limited liability companies; tax-exempt organizations and unrelated business income; business formation, operation, and disposition; executive compensation; and tax-exempt bonds and other structured financial products.


    Courtney Mooney, Counsel, Nixon Peabody LLP

    Courtney Mooney is Counsel in the Boston office of Nixon Peabody LLP. As a member of the Tax Credit Finance & Syndication Group, she handles transactions utilizing renewable energy tax credits. She assists developers and equity investors in financing the construction and development of solar and wind facilities across the country. Prior to joining Nixon Peabody, Ms. Mooney worked at Ernst & Young LLP in its National Tax practice. Her practice concentrated on advising tax equity investors and project developers on the business and tax implications arising from tax credit transactions. She assisted clients in structuring renewable energy deals that involved the investment tax credit and production tax credit. In her role at Ernst & Young LLP, Ms. Mooney reviewed and built financial models, provided tax advisory services, and performed financial and transactional due diligence.


    Mark Williams, Managing Director of Structured Finance Solutions, PNC Equipment Finance

    Mark Williams is Managing Director of Structured Finance Solutions for PNC Equipment Finance.  He has extensive experience in the origination, structuring and execution of tax and balance sheet-oriented transactions in the energy, transportation and infrastructure areas. His experience covers a wide range of asset classes including, renewable energy generation, traditional energy generation and transmission, infrastructure, transportation, mid-stream oil & gas and real estate.  Before joining PNC, Mr. Williams was a Managing Director at Global Structured Finance Advisors LLC.  He was previously a Managing Director at Dexia Global Structured Finance and at BTMU Capital Corporation.  He holds a Bachelor of Arts degree from the University of Wisconsin, Madison and a Juris Doctor degree from the University of Texas School of Law.

    Online Delivery

    We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

    • IMPORTANT NOTE: After November 30 you will not be able to join a Teams meeting using Internet Explorer 11. Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
    • You will receive a meeting invitation will include a link to join the meeting.
    • Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
      • You will need to join the appropriate meeting at the appropriate time.
    • If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
    • The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

    Register

    Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

    If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

    REGISTER NOW FOR THIS EVENT:

    Tax Equity Structuring and Strategies for Renewable Energy & Storage Projects

    June 28-29, 2022 | Online
    Individual attendee(s) - $ 1295.00 each

    Volume pricing also available

    Individual attendee tickets can be mixed with ticket packs for complete flexibility

    Pack of 5 attendees - $ 5,180.00 (20% discount)
    Pack of 10 attendees - $ 9,065.00 (30% discount)
    Pack of 20 attendees - $ 15,540.00 (40% discount)

    Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before May 27, 2022 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

    CEUs

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    EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

    EUCI is authorized by IACET to offer 1.4 CEUs for this event.

    Instructional Methods

    PowerPoint presentations and case studies will be used in program.

    Requirements For Successful Completion Of Program

    You must be logged in for the entire presentation and send in the evaluation after the online course is completed.


    Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.

    Course CPE Credits: 17.0
    There is no prerequisite for this Course.
    Program field of study: Specialized Knowledge
    Program Level: Basic
    Delivery Method: Group Internet Based
    Advanced Preparation: None

    CpeEUCI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org

     

     

    Who Should Attend

    • Solar, wind and other renewable energy project developers
    • Merchant and independent power producers
    • Tax and consulting firms associated with renewable energy development
    • Lenders and related financial groups associated with in renewable projects
    • Investors in renewable energy projects
    • Utilities and asset owners
    • Legal professionals associated with renewable energy development
    • Risk professionals associated with renewable energy development
    • Project managers associated with renewable energy development

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