A renewable incentive expires with the Treasury grant program.
Philip Spector is a tax partner in Troutman Sanders’ New York office. Email him at Phil.email@example.com.
Many public utilities have entered into long-term power-purchase agreements for power produced by wind, solar, biomass and geothermal projects. Some utilities have embraced these technologies and taken on ownership and operation of renewable assets. Whether a utility is merely buying power from a third-party developer or has a stake in the facility, many renewable energy projects rely on federal tax incentives for financing. However, the economic downturn has dramatically reduced the profits (and tax liabilities) of the banks and life companies that historically have funded tax equity, severely limiting the availability of tax credits for renewable energy projects.