Transferable Credit Opportunities for Renewable Energy Developers

Monetize Unused Tax Credits Through Participation in Ryan’s Investment Tax Credit Marketplace

The Inflation Reduction Act (IRA) of 2022 directed $386 billion to clean-energy spending and tax incentives, making it the federal government’s largest-ever investment in renewable energy. The IRA increased and extended the tax credits available to renewable energy projects, while also providing credits for additional technologies and project types.

Most importantly, the IRA added provisions that allow taxpayers who generate certain renewable energy tax credits to sell those credits to unrelated taxpayers—known as transferability—under IRC Section 6418. This presents a unique opportunity for U.S. federal income taxpayers to buy down effective tax rates through the purchase of qualified tax credits at a discount.

Prior to the IRA, renewable energy developers relied on tax equity partnerships to monetize tax benefits afforded to their projects. While the benefits of investing in the annual $20 billion tax equity market are significant, structural complexities make tax credit transfer an easier path to participation. Transferability offers a new opportunity with lower barriers to entry and significant benefits, including:

  • Purchase of credits at a discount, resulting in reduction of cash tax
  • Reduction in effective tax rate
  • Repurposing uninvestable capital (tax payments) to drive return on investment
  • A streamlined legal process
  • Comprehensive indemnity protections from credit sellers

Transferability Marketplace

Ryan has developed a first-of-its-kind web-based marketplace that allows renewable energy developers to solicit interest from and align with verified investors seeking to purchase transferable tax credits. Once a project is listed on the marketplace, investors can search for projects based on their investment needs, including project type, project size, rate of return, geographic location, and more. In addition, investors can register to receive real-time updates when projects that fit their needs become available.

Ryan’s Turnkey Implementation Strategy

Ryan’s team of investment tax credit experts provides a turnkey solution, making the renewable tax credit market accessible for all renewable energy developers. Our full- service approach includes investor identification, pre-transaction diligence, tax consulting throughout implementation, and coordination of compliance requirements for every tax credit transfer.

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