Law360 Quotes Greg Jenner on Effect of Tax Reform on Renewable Energy Financing

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“There's a finite pool of tax equity out there, and the likelihood is as the burden on corporations goes down, there will be less supply of tax equity.” —Greg Jenner quoted in Law360
Stoel Rives attorney Greg Jenner was quoted in a Law360 article titled “Clean Energy Developers Fret Over Trump Tax Reform Talk.” The article discusses the effects that changes in the corporate tax rate proposed by the Trump administration may have on the ability of renewable energy developers to secure financing for their projects. 

President Trump wants to see the corporate tax rate reduced to between 15 and 20 percent, and a tax reform plan being considered in the House of Representatives calls for a rate of 20 percent. The rate reduction could make tax equity financing, in which investors gain a project's tax benefits in exchange for their investment, unavailable to some developers and more expensive for the remainder. Tax equity financing currently accounts for approximately half of capital costs for wind and solar projects. 

The reduced interest in tax equity financing because of lower tax rates could also spell a reduction in the impact of the production tax credit for wind projects and investment tax credit for solar tax products, true tax credits that provide a dollar-for-dollar offset against total tax liability. 

Jenner says the prospect of changes to tax rates could prompt developers to speed up the timelines of their projects to take advantage of current tax rates and laws, in part because investors are already pushing for greater protections against the possible effects of tax law changes in their agreements with developers.

“If something gets serious, these agreements are being negotiated in a way that allow the investors to come in and change the deal,” he said.

Read “Clean Energy Developers Fret Over Trump Tax Reform Talk,” published January 30, 2017. (Subscription required.)    

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