Tax Structuring and Strategies for Renewable Energy & Storage Projects

Tax Structuring and Strategies for Renewable Energy & Storage Projects

Details of Inflation Reduction Act (IRA)

June 27-28, 2023 | Denver, CO and Online

“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 and other tax structuring strategies.   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.  And now, because of the Inflation Reduction Act (IRA), utilities, non-profits and other power-serving organizations have expanded options in the renewable energy development and asset ownership landscape.

This course is designed to give investors, developers, lenders, asset owners, utilities and their advisers an in-depth understanding of the tax and financial structuring issues involved in the development and structure of renewable energy projects.  It will examine in detail how the Inflation Recovery Act, other infrastructure legislation passed in 2022, and related IRS guidance have reshaped tax structuring for renewable energy and storage projects.

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 current 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 energy and low income community 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 27, 2023 : Mountain Time

    8:30 – 9:00 a.m.
    Registration & Continental Breakfast / Log In

    12:30 – 1:30 p.m.
    Lunch Break

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

     

    9:00 – 9:20 a.m. :: Overview and Introductions

    9:20 – 10:45 a.m. :: Who the Transaction Parties Are and Their Roles

    • Sponsor/ Project developer
    • Lender
    • Tax equity investor

    Overview of Tax Incentives for Renewable Energy

    • Primary Tax Incentives
      • 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
      • Accelerated depreciation
    • The role of partnerships and LLCs
    • Significance of “begun construction” provision and getting projects started
    • Overview of modifications introduced by IRA
    • Extensions of ITC and PTC
    • New credits
    • Add-ons to the credit rates…
    • Ability to sell tax credits or receive direct cash payments in lieu of tax credits

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

    11:00 a.m. – 12:30 a.m. :: Prevailing Wage and Adders Under the IRA

    • Prevailing wage and apprenticeships and the 5X multiplier
    • Add-ons for
      • Domestic content
      • Energy communities
      • Environmental justice (low income)
    • New reasons to pay attention to “begun construction”

    12:30 – 1:30 p.m. :: Group Luncheon

    1:30 – 2:00 p.m. :: Transaction Structures

    • Partnership flip
    • Sale leaseback
    • Lease pass-through (aka inverted lease)

    2:00 – 3:15 p.m. :: Partnership Structures and Modeling

    • Partnerships, LLCs and the pass-through of tax benefits
    • Allocations of income, loss, tax credits vs. distributions of income, capital accounts and DROs
    • Partner in a partnership, economic substance & profit motive
    • IRS revenue procedures and other guidance on partnership structures and “safe harbors”
    • Overview and role of financial models
    • Setting the inputs

    3:15 – 3:30 p.m. :: Afternoon Break

    3:30 – 5:00 p.m. :: Financial Models

    • Applying the inputs to an ITC model
    • Specific attention to the “Flip” structure

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

     

    Wednesday, June 28, 2023 : Mountain Time

    8:30 – 9:00 a.m.
    Continental Breakfast / 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. :: Financial Models (continued)

    • Overview of the PTC model
    • Applying the inputs
    • Specific attention to the “Flip” structure

    10:00 – 11:00 a.m. :: New Ways to Monetize Tax Credits

    • Section 6417 and Refundable Tax Credits for Governments, Tax-exempts and others
      • Who is eligible?
      • Applying for the refund and timing
      • Domestic Content Requirements
    • Section 6418 and Sales of Tax Credits
      • Who is eligible?
      • Tax consequences of selling credits
      • Possible Deal Structures
      • Risk of Audit for Purchasers
    • Issues for Tax-exempt Transactions not Using Direct Pay
      • PPAs vs leases
      • Control and Purchase Price Issues
      • Fallback when Domestic Content is a Problem

     11:00 – 11:15 a.m. :: Morning Break

    11:15 a.m. – 12:15 p.m. :: Other Tax Issues

    • Comparing individual and corporate investors
      • Passive activity rules
      • At-risk rules
      • Suspended losses, carry-forwards and carry-backs
    • Battery Storage
      • Storage as part of a project
      • “Stand-alone” under new rules
    • Repowering projects
      • The 80-20 test
      • Example of used vs. new property computations
      • Domestic content issues
    • Exit Strategies
      • Options, calls, puts
      • What is fair market value and why does it matter
      • Income character (long term gain vs. ordinary income)

    12:30 – 1:15 p.m. :: Group Luncheon

    1:15 – 2:15 p.m. :: Financial Models (continued)

    • Detailed review of typical lease pass-through financial model

    2:15 – 3:00 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
    • Loan guarantees
    • Interparty agreements between lender and tax equity

    3:00 – 3:15 p.m. :: Afternoon Break

    3:15 – 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 renegotiations and the like.

    5:00 p.m. :: Program Adjourns

    Instructors

    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.  He 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, J.D.


    Rod Eckhart is Managing Director for Renewable Energy at Seminole Financial Services.  He joined the Companies full time 2021 after having led Seminole Equity Partners for the previous seven years. In a career spanning more than two decades, Mr. Eckhardt has worked extensively with tax incented investments including renewable energy and real estate from both an equity and debt perspective. His experience includes fund management, origination, and syndication of investments representing more than $2 billion.  He has worked on behalf of tax credit syndicators, lenders, investors, developers and the United States Department of Energy. Mr. Eckhardt previously served as Vice President for Capmark Finance Inc. and as Investment Counsel for a division of GMAC. He earned his B.A. from Colorado State University and his J.D. from Gonzaga School of Law.


    Tony Grappone is a partner in the Boston 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 federal and state tax credits such as renewable energy tax credits.  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 and 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.  He earned a bachelor’s degree from Northeastern University in Boston, Mass.


    Forrest David 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; qualified opportunity funds and deal structures.  Mr. Milder is the author of more than 80 published articles on tax advantaged investments, and he has appeared many times on the front page of The Wall Street Journal (in the weekly Tax Report column), as well as in Bloomberg, and many other publications with comments on tax legislation.  He received his SB (Phi Beta Kappa) and SM from MIT, his JD from Harvard Law School, and a masters in taxation from Boston University School of Law. 


    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.

    Location

    EUCI Conference Center

    6400 S Fiddlers Green Cir.

    Greenwood Village CO, 80111

    The EUCI conference center is conveniently located adjacent to the Arapahoe at Village Center Light Rail Station, allowing easy access to and from DIA, Downtown, and Local Area Attractions.

    Nearby Hotels

    Residence Inn by Marriott Denver Tech Center
    6565 South Yosemite St.
    Greenwood Village, CO 80111
    303-740-7177

    Wingate by Wyndham Denver Tech
    8000 E. Peakview Ave.
    Greenwood Village, CO 80111
    (303) 626-2641

    SpringHill Suites by Marriott Denver Tech Center
    7900 E. Peakview Ave.
    Greenwood Village, CO 80111
    (303) 721-3321

    Register

    REGISTER NOW FOR THIS EVENT:

    Tax Structuring and Strategies for Renewable Energy & Storage Projects

    June 27-28, 2023 | Denver, CO
    Individual attendee(s) - $ 1695.00 each
    - OR - I choose to attend remotely
    Individual remote connections(s) - $ 1495.00 each

    Volume pricing available for remote connections

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

    Pack of 5 attendees - $ 5,980.00 (20% discount)
    Pack of 10 attendees - $ 10,465.00 (30% discount)
    Pack of 20 attendees - $ 17,940.00 (40% discount)

    Buy 4 in-person seats and only pay for 3! For this event every fourth in-person attendee is free!

    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 26, 2023 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 1.3 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: 15.5
    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