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Finance and Asset Management

The Great Debate - Structured Tax Equity vs. Transferability or Direct Pay in the IRA Age

Tuesday, September 12, 2023
2:30 PM – 3:30 PM PDT
Location: Titian 2303, Level 2, The Venetian

Sponsored By 
Solar Storage Wind

Learning Level: 201: Applies to those with some experience who are looking to build on or enhance existing knowledge.
Watch industry leaders square off on one of the hottest debates to come out of the Inflation Reduction Act – to structure, or not to structure? On the one hand, sponsors in traditional funds face steep transaction costs, binary capital risk, and a veritable obstacle course of underwriting requirements from stringent tax equity investors. On the other hand, sponsors who may opt to sell their credits directly instead of going through a structured fund lose out on valuing depreciation and claiming ITCs on the full fair market value of the asset. Traditional tax equity can be costly and cumbersome, leaving smaller projects and developers behind – is shifting to transferability the answer? Will the inertia of structured funds win the day? Or does the truth lie in the middle? Come prepared to ‘vote with your feet’ to determine the winner of the Great Debate.

Learning Objectives:

  • Evaluate the pros and cons of structured funds in the context of the Inflation Reduction Act. Understand the transaction costs, capital risks, and underwriting requirements associated with traditional funds, and the potential limitations they pose for sponsors in claiming ITCs and valuing depreciation.
  • Analyze the potential benefits and drawbacks of selling credits directly instead of going through a structured fund. Explore how this approach may address the cost and complexity concerns associated with traditional tax equity, and its implications for smaller projects and developers.
  • Participate in the 'Great Debate' session and engage in a critical evaluation of the arguments presented by industry leaders. Assess the merits of shifting to transferability versus the inertia of structured funds. Use your analysis and understanding of the debate to make an informed decision and contribute to the determination of the winning perspective.