kWh Analytics Compiles List Of Active Tax-Equity Investors

By Frank Andorka, Senior Correspondent

As the tax incentives begin to wind down, it’s even more important than ever to be able to identify investors who can afford to take on sufficient tax equity to consummate solar projects.

To do the due diligence to figure out who is currently interested in using equity to fund the project, however, can often increase costs and render deals undoable.

Which is why having a company like kWh Analytics, a solar risk manager, do some portion of the work for you is such a boon. This morning, the company released its Solar Lendscape for Tax Equity, a free resource that profiles 28 tax equity investors. For developers looking to raise capital, the Solar Lendscape catalogs the industry’s most active debt and tax equity investors, including details on check size, target market segments, and product type.

The industry’s first Solar Lendscape was released in June 2018 and initially focused exclusively on providers of debt. Following industry interest, kWh Analytics developed Solar Lendscape for Tax Equity to also include an overview of tax equity investors.

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Project development is known to be a complex engagement in which the rules and variables regularly change. One of the most important variables for a developer to track is the availability of capital. Leveraging their experience working with investors, kWh Analytics built a simple, free tool to help developers assess the investor landscape and find the right partner for their projects.

“Solar Lendscape should prove a useful tool for developers trying to raise capital for their projects,” says Keith Martin, Partner at Norton Rose Fulbright. “It was inevitable that someone would create an internet portal to help with that process.”

Fast facts from the Solar Lendscape for Tax Equity:

Most organizations are using partnerships as a preferred structure.
Nearly a dozen investors are investing in community solar.
There was an influx of new tax equity providers in 2017, following the extension of the investment tax credit in 2016.

SEIA Issues Comprehensive Update To Solar Tax Guide

By Frank Andorka, Senior Correspondent

Even the most experienced tax advisers may not know how to navigate the complex matter of solar tax incentives and credits. That’s why it’s important to have solar-specific experts weigh in on projects. In particular, with the investment tax credits starting to phase out, understanding tax incentives becomes all the more critical.

Oh, if only there were a guide of some sort that people could use to figure it out.

Enter the Solar Energy Industries Association, which has been putting together various versions of a guide for the last 20 years. Now they’ve released Version 9.0, the first comprehensive update of the SEIA Solar Tax Manual since 2016.

Among several updates, the new guide incorporates the commence construction guidance issued by the IRS earlier this year and includes the effects of the “Tax Cuts and Jobs Act” enacted at the end of 2017.

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“Given all of the recent changes, the demand for this resource has never been greater,” said Abigail Ross Hopper, SEIA’s president and CEO. “This comprehensive document provides SEIA members a leg up, as it explains and fully outlines the potential tax benefits and deal structures for solar projects.”

Developed with the help of Keith Martin at Norton Rose Fullbright US LLP, the SEIA Solar Tax Manual covers tax credits for both commercial and residential solar projects, tax credit bonds, loan guarantees, low-interest loans and grants, state tax considerations, and more.

“The SEIA Tax Manual is a valuable SEIA member benefit,” said Lee Peterson, Senior Tax Manager for CohnReznick’s National Renewable Energy Practice. “It is incredibly valuable because it collects in one place the primary federal tax rules and concepts that drive the industry, while being easy for non-tax specialists to read and use.”

The SEIA Solar Tax Manual is a SEIA members-only benefit. To view the executive summary and learn more about becoming a SEIA member, go here.

IRS Regifts Utility-Scale Solar Four More Years Of 30% ITC

By Frank Andorka, Senior Correspondentthey

Four more years! Four more years!

That’s the mantra some utility-scale solar developers are chanting today after the Internal Revenue Service (IRS) decided to extend the 30% investment tax credit (ITC) through 2023 as long as they have broken ground or spent 5% of the total expected investment in the project by the end of 2019.

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Bloomberg reports the opinion, issued by the IRS late last week, came as something of a surprise to most utility-scale developers. As the reporters noted:

“The news is positive for utility scale solar developers who can now avoid solar tariffs imposed on imports through 2021, procure majority of their solar panels in later years, and still qualify for the higher tax credits, analysts led by Michael Weinstein, said in the note.

If developers break ground on January 1, 2020 or beyond, the credit drops to 26%.

The decision, combined with China’s unexpected decision to halt construction on its own domestic industry, could help move some utility-scale projects that had previously been shelved back into an active status with developers.

China’s decision to scotch its domestic industry means inexpensive modules could soon be flooding the U.S. market, with utility-scale projects benefiting the most.

Jigar Shah Speaks On The Future Of U.S. Solar, And He’s Optimistic

By Frank Andorka, Senior Correspondent

What Happened: Jigar Shah talked with GreenBiz writer Lucy Kessler to discuss how taxes and tariffs are going to affect the future of the solar industry.

In the interview, he argues the “sky is falling” mentality the solar industry has surrounding President Trump’s ill-advised tariffs on imported modules is counterproductive and overblown.
He also believes that while the tax-code changes may slow tax-equity financing in solar temporarily, the dust will settle once everyone understands the details of the law.

SolarWakeup’s View: Ever since I joined the solar industry in 2011, the name Jigar Shah has been spoken in the hushed tones usually reserved for the Pope or, in certain circles, Bruce Springsteen – and with good reason.

Shah was one of the earliest investors to recognize the future of solar before it became the hip electricity source it is now, and he built an extraordinarily successful business in SunEdison (its collapse happened long after he had left). Now co-founder and president of Generate Capital, Shah is still one of the most sought-after opinion leaders in the solar industry, which is why GreenBiz did an interview with him on the subject of the solar tariffs, tax-law changes and state-level solar policy initiatives.

The whole interview is interesting because, as someone who has already seen some of the harshest cycles the solar industry has been through, Jigar Shah can stand back and look at the current policy upheaval with the unbiased eye of an outsider.

(And Jigar Shah is unflappable. I remember watching him get hounded one year at the Midwest Solar Expo by some snot-nosed reporter from an upstart solar publication about the first round of SolarWorld Americas trade actions, and he handled my incessant nagging with otherworldly grace and aplomb.)

But the point I found most fascinating, in part because it does feel like so few other people are talking about it, is where Jigar Shah talks about the future of solar manufacturing and says tariffs aren’t the right policy mechanism to restore it. Instead, he suggests the United States finally join the rest of the developed Western world and develop a national, integrated, coherent industrial policy.

I don’t know if he could hear me, but I stood up in Cleveland, Ohio, and cheered as loudly as if the Browns had won the Super Bowl.

Shah told Kessler:

I honestly think it’s more about the United States having an industrial policy. Does the United States actually want manufacturing in this country? If it does, it needs to support those companies, like they do in Canada and Germany.

We have to provide financial incentives such as loans or grants to get these companies to manufacture here, as other countries do. Tariffs are not going to support manufacturing in the United States. I think the opportunity is ripe, but only if the federal and state governments have proactive industrial policies.

It’s clear to any seasoned solar observer that the idea that tariffs will bring back solar manufacturing is idiotic. To my knowledge, only one company has decided for sure to build a new factory in the country, and its commitment has turned into the incredibly shrinking Jacksonville plant. There are rumors of others, but as of now they are just that – rumors. One company that tried to save itself with the tariffs is near to being sold off for parts, and despite loud promises, only whispers are coming out of the other’s headquarters now.

In the end, Shah’s forward-thinking idea is the way to bring solar manufacturing back to the United States. If only our leaders in Washington could hear and heed Shah’s “radical” advice (it’s only radical in this country).

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An optimistic Jigar Shah talks tariffs, taxes and state leaders in clean energy

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