Trends in Tax Equity for Renewables

Alexander Richter 5 Dec 2008

The market for tax equity in the United States has almost totally disappeared. That means that for those who have cash for investments this means a fantastic opportunity in renewables today.

Below comment has been part of an invitation to an interactive web conference on the topic (December 16, 2008. 1.00-2.30 pm EST)
Invitation to the web conference here.
“About half the large institutions that invested in renewable energy projects in the last two years have dropped out of the market. The supply of tax equity for such projects this year is expected to fall $2 to $3 billion short of demand. The global financial meltdown and contraction in the US tax equity market could not have come at a worse time for developers of wind farms and geothermal and biomass projects, who were just given a limited extension of production tax credits for their projects. It has also put solar developers in a bind. Solar PV developers have a tight window of only three months after projects go into service to raise tax equity against them. Developers of larger, solar thermal projects may have trouble honoring commitment to supply power under long-term contracts at the rates promised utilities because their assumptions about cost of capital may now be incorrect.” Source: energycontext.com