Analysis of recent news and developments affecting the renewable energy industry
The COVID-19 pandemic has disrupted strategies for ensuring that solar and wind projects will satisfy the “beginning of construction” requirements for purposes of the ITC and PTC, with respect to both the procurement of equipment and the placing in service of projects.
Delays in Safe Harbor Equipment Procurement
To qualify for the 30% ITC, solar…
On July 27, 2018, the U.S. Court of Appeals for the Federal Circuit issued an opinion reversing the decision of the Court of Federal Claims in Alta Wind I Owner-Lessor C, et al. v. U.S. The Federal Circuit held that goodwill and going concern value could attach to the assets of wind facilities that…
On June 22, 2018, the Internal Revenue Service (the “IRS”) issued Notice 2018-59, which provides long-awaited guidance on when construction of energy property will have begun for purposes of the Investment Tax Credit (“ITC”) under section 48 of the Internal Revenue Code (the “Code”).
The guidance is similar in many respects to the beginning…
Introduction
The emerging trend of energy private equity (“EPE”) funds is revolutionizing the renewable energy field, as renewable energy joins leveraged buyouts, venture capital and hedge funds as asset classes that institutional investors and high net worth investors are using to deploy their capital in a diversified manner, with the added “social good” of investing in a sustainable energy future. Sophisticated energy sponsors are increasingly eschewing the traditional project finance structure, in which capital stacks are created for each deal, in favor of a private equity fund structure in which committed capital is deployed by the sponsor in accordance with a specified investment strategy. From the sponsors’ perspective, the goal is the “holy grail” of all private equity sponsors – permanent capital. This trend can be seen as further evidence of renewable energy maturing as an asset class within the larger investment world. Since this trend is so new, the terms of EPE funds vary tremendously. However, some common terms are summarized below.…
Continue Reading A Revolution Coming in Renewable Energy Finance: The Emergence of Energy Private Equity Funds
