BT Renewable Energy Tax Credit Fund

The Inflation Reduction Act (IRA) is the largest clean energy incentive effort in U.S. history. The Act expanded the number of tax credit programs, amount of available funding and processes for utilizing funds.

Most importantly, the IRA introduced the concept of “transferability” — allowing a one-time transfer of a credit, essentially a tax rebate, from seller to buyer. Tax credit buyers are typically either C-corporations or individuals, trusts or family offices with passive income and an expected tax liability, looking to purchase credits to lower their tax liability.

Benefits of purchasing transferable renewable energy tax credits

1. No project involvement. Buyers can acquire the credit without being an owner in a clean energy development project.
2. Same-year usage. Buyers can target their capital directly for the tax year(s) in which they have tax liability to offset, eliminating the need to project for future tax years.
3. Tax-exempt. The discount between credit value and purchase price is not subject to tax for the buyer.
4. Offset quarterly tax payments. Buyers can use credits against quarterly estimated income tax payments.
5. Carryback or carryforward. Buyers can generally use credits via a three-year carryback or 22-year carryforward