Renewable Energy & Storage Projects Tax Equity Financing and Structuring

November 18-19, 2024 | Phoenix, AZ and Online :: Mountain 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.

“Great to get the newest IRA tax notifications and rulings as they are hot off the press!” Co-owner, D2 Solar LLC

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, now amplified under numerous provisions of the Inflation Reduction Act (IRA).   How soon investors can get their desired return and exit the project, how much a project developer receives – and when – depends in large measure on how the tax incentives are deployed.  And now, because of the Inflation Reduction Act (IRA), utilities, non-profits and other power-serving organizations also have (previously-unavailable) options in the renewable energy development and asset ownership landscape.

This course is designed to give investors, developers, lenders, asset owners, utilities and their advisors an in-depth understanding of the tax issues and financial structuring issues involved in the development and structure of renewable energy projects.  It will examine in detail how the Inflation Reduction Act (IRA), other infrastructure legislation passed in 2022, and related IRS guidance have re-shaped 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 issues that experienced developers, lenders and investors confront in projects
• Examine how to present financial documents to achieve the greatest “bankability”

Monday, November 18, 2024 : Mountain Time

8:30 – 8:45 a.m. :: Overview and Introductions

8:45 – 10:15 a.m. :: Survey of Tax Incentive Transaction Instruments

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 / facility cost
  • Accelerated depreciation
• The role of partnerships and LLCs
• Significance of “begun construction” 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

10:15 – 10:30 a.m. :: Morning Break

10:30 – 11:00 a.m. :: Transaction Structures

• Partnership flip
• Sale leaseback
• Lease pass-through (aka inverted lease)
• Sales of credits
• Refundable credits

11:00 a.m. – 12:30 p.m. :: Adders & Multipliers Under the IRA

• Prevailing wage and apprenticeship 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 – 1:15 p.m. :: Lunch Break

1:15 – 2:15 p.m. :: Tax Elements and Characteristics

• Partnerships, LLCs and the pass-through of tax benefits
• Allocations of income, loss, tax credits vs. distributions of income, Capital Accounts and introduction to deficit restoration obligations (DROs)
• Partner in a partnership, economic substance and profit motive
• Safe Harbors

2:15 – 3:15 p.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

3:15 – 3:30 p.m. :: Afternoon Break

3:30 – 3:45 p.m. :: Financial Models

• Overview and role of financial models
• Setting the inputs
• Pre- and post- transfer of credits

3:45 – 4:45 p.m. :: Financial Models – ITC “Flip”

4:45 p.m. :: Program Adjourns for Day

Tuesday, November 19, 2024 : Mountain Time

8:30 – 10:00 a.m. :: Tax Issues in Greater Detail

• Preserving tax credit eligibility and “begun construction”
• Physical work of a significant nature
• 5% Safe Harbor
• Comparing individual and corporate investors
  • Passive activity rules
  • At-risk rules
  • Suspended losses, carry-forwards and carry-backs
• Participation of tax-exempt entities
  • Who will own the project?
  • PPAs vs leases
  • Direct pay provisions of the IRA

10:00 – 10:15 a.m. :: Morning Break

10:15 – 11:15 a.m. :: Tax Issues in Greater Detail (Cont’d)

• Battery Storage
  • Comparing storage as part of a project with “stand-alone”
• Repowering projects (80-20 Test)
  • Used vs. new property analysis
  • IRS guidance
• Exit Strategies
  • Options, calls, puts
  • What is fair market value and why does it matter?

11:15 a.m. – 12:30 p.m. :: Financial Models – Production Tax Credit (PTC) “Flip” Model

12:30 – 1:15 p.m. :: Lunch Break

1:15 – 2:15 p.m. :: Financial Models – Typical Lease Pass-Through 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 – 4:45 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 discuss:

• Aspects of how to assemble a team of deal experts
• Externalities influencing the tax equity landscape
  • Supply chain challenges
  • Inflation impacts
  • Contract re-negotiations
  • Interest rate shifts
• Ensuring that allocations of tax benefits work
  • Capital Accounts and deficit reduction obligations (DROs)
• What to do when things go awry
  • Delays in project being placed in service
  • Insufficient capital to cover first year capital requirements
  • Reduced capital contribution

4:45 p.m. :: Program Adjournment

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.

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. 

Carmen Awad is a Financial Forecasting Manager in the North Andover office of Novogradac & Company LLP, where she specializes in providing financial forecasting, cost segregation studies, and consulting services to developers, syndicators, and investors of projects that qualify for federal and state tax credits in the renewable energy sector. Prior to joining Novogradac & Company LLP, Ms. Awad worked for renewable energy developers such as Origis, tax equity banks such as MUFG Union Bank, and lenders such as CIT Bank.  She earned a BBA degree in Finance and a minor in Accounting from The University of Toledo and an MBA degree in Investments and Corporate Finance from University of Notre Dame.

MasTec
7878 N 16th Street, Suite 190
Phoenix, AZ 85020

REGISTER NOW FOR THIS EVENT:

Renewable Energy & Storage Projects Tax Equity Financing and Structuring

November 18-19, 2024 | Phoenix, AZ

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 October 18, 2024 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

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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: 16.5
There is no prerequisite for this Course.
Program field of study: Taxes – Technical
Program Level: Basic
Delivery Method: Group Internet Based
Advanced Preparation: None

EUCI 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