A marketplace for clean energy tax credits

Reunion helps renewable energy buyers, sellers, advisors, and financiers get better deals done, faster.
Tax credit buyers
Project developers

Increasing access to clean energy financing
Reunion supports a variety of sustainable technology project types
Our Experience Sets Us Apart
Reunion’s Founding Team Has Experience Raising Over $2B To Fund Clean Energy Projects

insights and News
our latest insights.

The Inflation Reduction Act of 2022 (IRA) enables the purchase and sale of certain federal tax credits through a process referred to as transferability. Using a simple purchase contract, corporate tax departments can realize savings of up to 10% on their federal income tax burden by acquiring transferable tax credits at a discount from domestic clean energy projects such as wind, solar, and battery storage. Transferability was created in part to help minimize the complexity associated with traditional tax equity investing. By reducing the barrier to entry for corporate taxpayers to access these credits, the IRA seeks to incentivize more capital flowing into the sustainable energy economy.
How We Got Here
The IRA has been called the largest piece of climate legislation ever enacted. The backbone of the climate and energy spending in the bill is more than $230 billion of tax credits for clean energy projects, carbon capture and sequestration projects, electric vehicle charging equipment, and sustainable technology manufacturing. A small number of corporate taxpayers have traditionally helped project developers monetize these tax credits through a process called tax equity financing. This process is complex and requires a team of lawyers, accountants, and appraisers to help establish complicated partnership structures.As a result, the majority of capital that flowed into the $15B-$20B pre-IRA tax equity market was historically provided by a handful of large banks. Given the limitations on these banks’ tax appetite, something would need to change in order to attract capital for the IRA’s 10x or greater tax credit regime. To solve this challenge, Congress created a new monetization mechanism called transferability or transferable tax credits. Now, post-IRA, any company with federal income tax liability may use a standardized purchase and sale agreement to buy tax credits at a discounted rate, allowing them to earn a savings on their tax bill while also financing new sustainable infrastructure.

What Corporate Tax Groups and Sustainability Teams Need to Know
By exchanging cash for transferable tax credits, a corporation could, for example, spend $45M for $50M of tax savings, realizing a $5M savings compared with paying their normal federal income tax liability.There are nine types of tax credits (across 11 sections of the tax code) now available for transferability. Companies can buy transferable credits from different technologies and project types. More established technologies are likely to be viewed as lower risk, whereas newer technologies may offer more attractive pricing. Across these nine types of tax credits, several of them are categorized as “production credits” (PTCs) or “investment credits” (ITCs). This terminology refers to how the credit is generated–either as the item in question is produced (e.g. kilowatt hours of renewable energy) or as capital is invested in the associated project (e.g. a percentage of the cost of a solar farm). Tax groups will want to make strategic decisions about sourcing PTCs vs. ITCs or both, in order to secure streams of tax credits over time in the case of PTCs or one-off purchases in the case of ITCs. Intermediaries can help in structuring the procurement of these credits.

Timing and Process
Some specifics of the transfer process are awaiting clarification from the Treasury department, but there are some things we already know from section 6418 of the U.S. tax code:- Credits can be elected for transfer up to the time the seller files their tax return (Example: a credit generated in CY2023 can be transferred to a buyer until April 15, 2024 or October 15, 2024 for extended corporate filers)- Credits can only be transferred in exchange for cash to an unrelated party- Cash paid by the buyer is nondeductible- Credits may only be transferred one time; resale of the credits is not allowed- Buyers may carry back the credits up to three years, and carry forward the credits up to 22 yearsThe transactions themselves will be completed with a customized, but relatively simple purchase and sale-style agreement. These should be carefully constructed by experienced tax attorneys to ensure adequate protections for buyers and sellers, but are ultimately less complex in nature than traditional tax equity partnership structures.
Risk Management
Transferable tax credits carry lower risk, in certain cases, versus traditional tax equity partnerships. For ITCs, a tax credit buyer is not concerned with the ongoing performance of the project beyond low-probability recapture events. And even for PTCs, the primary performance risk is related to the produced credit volume and not financial performance. The projects and developers associated with these credits should be vetted and underwritten to ensure credits are delivered as expected. For buyers of transferable credits, this review process can add certainty to reduce disallowance or recapture risk. Typically, buyers can also secure indemnifications from sellers to protect themselves in the event of recapture events. Transferable credits can also be insured against recapture, providing a backstop to indemnification.
In Conclusion
Transferability represents a new pathway to access well-understood tax benefits for corporate taxpayers. By participating in the transferable tax credit market, companies can “do well and do good” by supporting renewable energy infrastructure and reduce their tax liability. Partnering with seasoned clean energy finance experts can help reduce risk and ensure a smooth, replicable transition process. For more information or to explore live project opportunities, please reach out to kevin@reunioninfra.com

Corporates are now one of the most prolific forces on the planet for meaningful climate action. Who saw that coming 10 years ago!? A leading benchmark group, Science Based Targets initiative (SBTi), now counts nearly 5,000 companies taking action, with 2,600+ companies setting formal science-based targets and 1,800 companies with net zero goals.
A key decarbonization activity has been to offset electricity-related emissions (also known as “Scope 2” emissions) by purchasing electricity from renewable energy generation–often via a corporate power purchase agreement, or PPA.
While PPAs have been a great tool to drive new renewables build-out, not every corporate has the financial strength, risk appetite, or ability to sign up for long-term PPA contracts, which typically run for 10 to 20 years. Fortunately, following the passage of the Inflation Reduction Act (IRA), sustainability leaders now have even more ways to tackle their Scope 2 emissions targets.
Tax credits – why do they matter?
A central feature of the IRA was the expanded tax credit regime. Now, renewable energy and sustainable infrastructure projects can qualify for 10+ years of tax credits which can be monetized as part of the project financing process.
These tax credits have drawn a lot of attention for driving top line growth projections for renewables. For example, Wood Mackenzie estimates that solar, wind, and battery storage alone could produce as much as $90B of tax credits per year:

As the chart below shows, the IRA tax credit incentives will help drive significant deployment of new wind, solar and other sustainable technologies. .

Less attention has been paid to where this capital comes from. Because the vast majority of clean energy funding in the IRA came in the form of tax credits, the unspoken assumption is that corporate taxpayers will simply monetize these credits for project developers as they did with pre-IRA tax credits. But going from a tax credit market that was traditionally in the $18B-$20B range pre-IRA to one that is 2-3x larger or more post-IRA will necessitate a large number of new corporate taxpayers to enter the market and trade tax capacity in the form of cash for tax credits.

Source: Norton Rose Fulbright
What does this have to do with corporate sustainability?
As corporates look for energy-related sustainability tools beyond the PPA, investing capital directly into projects via tax equity or its new post-IRA cousin, transferability, is an appealing option. Some companies like Starbucks, Facebook, and Nestlé, have invested in tax credits with great effect already.
With the IRA’s new transferability provision, the process is more straightforward than tax equity; companies with tax liability (which they have to pay anyway), can instead purchase tax credits at a discount. For example, paying $0.90 for $1.00 of tax credits on $50M of tax liability would net an immediate $5M savings.

Source: Reunion Infrastructure
Investing in transferable tax credits has a sustainability story, and it drives meaningful clean energy impact. But there’s a catch–the investment activity of monetizing tax credits on behalf of a specific renewable energy project doesn’t “count” towards Scope 2 emissions reduction targets. The corporate, despite putting tens or hundreds of millions of dollars into a project, would also need to buy the energy attribute certificates (EACs) or renewable energy certificates (RECs) to make a formal “green” claim.
Fortunately for sustainability leaders, the savings generated by purchasing tax credits–$5M in our example above–could be redirected to offset the cost of REC procurement. This approach helps bring sustainability activity more directly into alignment with the financial incentives of the business.
“From a CFO’s perspective, an interesting
feature of the green-energy credits is a
provision in the law that makes the credits
transferable one time”
Deloitte, “For CFOs, the full impact of the Inflation Reduction Act is still coming into focus” [link]
Corporate sustainability leaders can be internal champions for tax credit purchases
Corporate sustainability leaders should champion tax credit purchases inside their company for three reasons:
- It drives real impact – as noted above, tax credit monetization is a real, measurable, and impactful way to put steel-in-the-ground. Without tax credit financing, projects don’t get built. Any company putting $20M, $50M or $100M+ of tax capacity to work financing projects is directly accelerating the energy transition.
- It fills an enormous funding gap for clean energy – also noted above is the gap between today’s tax credit investment market (~$20B annually) and the very near future of ~$60 to $90B in annual demand for tax credits. . Only taxpaying corporates can effectively monetize these credits to enable projects. Without them, the promises of the IRA and much of the decarbonization effort falls short.
- It provides an economic benefit for action on sustainability – unlike RECs and PPAs which are often a net cost to the corporation, tax credits are a net benefit, saving 7-10% annually on tax liabilities that the company is already responsible for. These savings can be reinvested in REC purchases or other activities to secure the desired environmental attributes.
Conclusion – sustainability teams can “do well and do good” with tax credits
Given the deep necessity of more corporates putting their tax liability to work in monetizing tax credits for renewable energy project developers, sustainability teams are a natural place to start for leading this effort.
The alignment of doing well, by improving the bottom line via tax savings, and doing good, by sending already spoken for capital directly into renewable energy projects, should have any sustainability leader excited to pick up the phone and call their corporate finance team to get started.

Anyone who has developed solar projects knows about the “December Rush” - all hands on deck to get projects built and interconnected, hounding utilities for inspections and PTO letters, coordinating last minute signature pages up until COB on New Year’s Eve… all because tax equity investors generally allocate tax capacity on an annual, tax year basis. If tax equity commits to fund a project in a certain year, it wants to make sure it gets the expected tax benefits from that project in that tax year. Accordingly, there is significant pressure for developers not to miss the 12/31 deadline, and often there are significant financial penalties if they do - hence, the December Rush that many developers and financiers know well. (For years, I never took vacation until January 1, something many of my peers can relate to).
Transferability is appropriately labeled a “game changer.” Having worked in project finance and tax equity for nearly 20 years, I knew that the ability for clean energy tax credits to be freely bought and sold would be transformative and disruptive. So much so, that soon after the passage of the Inflation Reduction Act, I dropped everything and launched Reunion with my longtime colleague and renewable energy veteran, Andy Moon.
Lately, I’ve heard some people mention that transferability gives developers the “gift of time” and will alleviate the massive pressure to place projects in service by the end of year. Unfortunately, transferability, while transformative, is not a panacea for all challenges.
What is the gift of time?
In a typical tax equity partnership transaction, a tax equity partner must fund 20% of its investment by mechanical completion. Time is not a developer’s friend; as a project approaches COD, the need to close tax equity becomes more and more urgent (and a developer’s leverage in tax equity negotiations diminishes). With the IRA, this urgency becomes less pronounced, because the developer always has a fall back option to sell tax credits.
With transferable tax credits, Section 6418 of the Internal Revenue Code (IRC) indicates that the seller of the credit has until the filing date of its tax returns (as extended) to sell the credits. Therefore, the owner of a project that is being placed in service on 12/31/2023 can sell the associated 2023 tax credits up until 9/15/2024 (the extended filing date for partnerships). If the project is placed in service on 1/1/24, it generates a 2024 credit but that credit can be sold up until 9/15/2025.
This certainly gives developers more flexibility on when to sell the credit. However, what hasn’t changed is that tax credits (specifically, the IRC §48 investment tax credit which applies to solar, storage and other technologies) are generated when the project is placed in service. So a project placed in service on 12/31/2023 will generate a 2023 tax credit, whereas a project placed in service on 1/1/2024 will generate a 2024 credit. This is true whether or not the tax credit is transferred or allocated to a partner in a traditional tax equity partnership.
So a tax credit buyer who has agreed to buy a 2023 credit from a project developer to reduce its 2023 tax liability will not be obligated to close the purchase if the project slips to 2024 (unless of course, this has been contemplated in the deal documents and priced accordingly).
The IRA does include a 3-year carryback provision, but it’s not straightforward to utilize
At first blush, the 3-year carryback seems like an incredible tool to unlock significant tax liability and add flexibility. . However, actually utilizing the carryback is cumbersome in practice; it is not as simple as just carrying the credit back to the prior year.
In the example above, a developer misses the year end deadline and places a project in service on 1/1/2024. It sells the 2024 credits to a buyer who wishes to apply those credits against 2023 liability. Unfortunately, the buyer must first apply those credits against its 2024 liability (which they cannot actually do until filing its 2024 tax return in 2025). Only to the extent that there are unused credits after application against 2024 liability can the buyer carryback the credits. But it must first carryback the credits to the earliest possible date applicable, or 2021; any unused credits would then be applied to 2022; then finally to 2023. Buyers do not have the discretion to pick and choose which years to apply carryback credits.1
Practically speaking, carrying back credits would require a buyer to amend one or more of its prior year returns, which has its own complexities (Joint Committee review, increased audit risk, etc). The juice may not be worth the squeeze.2
Reunion is committed to sharing transparently both the benefits and risks of transferable tax credits, based on our years of experience structuring renewable energy finance transactions. Transferability will unlock billions of dollars in additional renewable energy financing, by attracting new investors to the space with a simplified and low-risk investment process. However, tax credit buyers will continue to need to ensure that the developers they work with are able to deliver tax credits within the desired tax year. Reunion can help both tax credit buyers and sellers navigate this challenge.
If you'd like to learn more about how Reunion can help you buy or sell the highest quality clean energy tax credits, please reach out to info@reunioninfra.com.
___________________________________________________________
Footnotes:
[1] IRC §39 is the code section that governs carrybacks.
[2] Anecdotally, many people don’t realize that the pre-IRA §48 credit had a one year carryback feature, and not surprisingly, was rarely employed in prior tax equity deals.

The Inflation Reduction Act of 2022 (IRA) was a sweeping bill with many implications for the energy transition–particularly the financing of new projects. In the IRA, Congress specifically sought to incentivize private sector investment into the energy transition. One of the most prominent ways they did this was through tax credits, to incentivize corporate taxpayers to redirect capital into the clean energy and sustainable technology industry.
A recent assessment of the IRA from Boston Consulting Group (BCG) and Breakthrough Energy puts a fine point on the value of tax credits in switching to low carbon energy, by demonstrating the impact of tax credits on levelized cost of energy (LCOE).

Per BCG’s analysis, tax credits from the IRA and other major energy-related legislation can drive between 20% and 60% reductions in LCOE across six technology types.
But a low LCOE and actual steel-in-the-ground are not the same thing. To physically deploy these less expensive technologies, project developers will require many billions of dollars of project finance capital.

Bloomberg illustrates just how significant the demand for investment dollars may be over the next 25-30 years. This demand is a powerful function of government policies, decarbonization goals of Fortune 500 companies that increasingly extend down into global supply chains, and the aforementioned plummeting LCOE that allows low carbon energy technologies to displace incumbent coal, gas and oil-based power generation. That’s a very difficult demand-pull force to derail once it gets going.
The Opportunity & Challenge of Tax Credits for Project Finance
So where will all this capital come from? In the U.S. the IRA’s tax credit regime significantly enhances project capital stacks with upwards of $500 billion of tax credits over the next 10-20 years, depending on various estimates and factors. Here’s one such estimate from Credit Suisse, which projects $576B in tax credits over a 10-year period.

The IRA also enhanced the value of tax credits on a project-by-project basis. For example, developers can now monetize up to 70% of a solar project’s costs with the addition of bonus credits. Project developers typically are not able to absorb the tax benefits from their projects, and traditionally would tap into a $15B-20B tax equity market to finance the tax credit portion of any given project. With the enhancements from the IRA, the renewable energy sector could require up to 3.5x market growth by 2030 and possibly ~5x growth by 2049 according to demand projections by Wood Mackenzie. And that doesn’t even include fuels, CCUS, hydrogen, manufacturing or any of the other tax credits created by the IRA. That's a lot of external tax appetite being put to work that did not previously participate in this market.

Monetizing tax credits for project development will be one of the primary barriers to clean energy deployment, particularly in the initial years following the IRA legislation as corporate tax groups are educated on the opportunity to redirect their tax payments into renewable energy tax credit investments.
Recruiting Capital into Sustainable Technology Tax Credits with Transferability
Following the IRA, the question developers now face is how quickly and to what extent they'll be able to monetize these benefits as they execute on their development pipeline.
Tax credit-related capital has traditionally come from large banks such as JP Morgan Chase, Bank of America, Wells Fargo, and US Bank; a handful of banks account for the majority of tax equity investment capital in recent years.
The IRA legislation seeks to broaden this pool of capital to meet the anticipated demand represented above in the WoodMac chart. To do this, they created a transaction mechanism called Transferability which allows project developers to monetize their credits with a simple purchase-and-sale agreement, rather than the traditional equity partnership investment structure.
Here is a detailed description of transferability.
Transferability as a Promising Solution
Transferability isn't intended to replace traditional tax equity; instead, it gives corporate tax and treasury teams an alternative pathway to:
- Easily secure tax benefits to offset their federal income tax liability, and
- Participate in financing new, renewable energy and sustainability infrastructure that aligns with their corporate ESG goals
The value proposition for corporate taxpayers is simple: redirect your tax payments into clean energy projects and receive a discount on your federal tax liability. The reality is a little more complicated – tax credit purchases do carry some risks and reporting requirements, so partnering with third parties on transactions can often streamline the process. But earning an estimated 8%-10% discount on federal tax with controllable risks will be an attractive proposition to corporate taxpayers who may have chosen not to pursue traditional tax equity investments.
If the IRA is successful in its goal to scale more established technologies while kickstarting newer technologies like hydrogen and CCUS, a deep market for transferable tax credits could develop by 2030 with wider pricing spreads and creative structures used to pull more capital in from corporate taxpayers.
In conclusion, while it’s early days in the post-IRA renewable energy project finance market, the outlook is bright for both sustainable technology growth broadly speaking and for transferable tax credits sales specifically.
About Reunion Infrastructure
Reunion Infrastructure is leading the market on transferability as a service by packaging market expertise with core services needed to execute rapid, de-risked, and repeatable transferable tax credit transactions. Through its marketplace platform, Reunion provides:
- Access to a best-in-class range of project and tax credit types
- The ability to bundle different project or credit types into risk-adjusted portfolios
- Comprehensive due diligence and legal documentation to project buyers
- Access to tax credit insurance products
- Reporting services to ensure credit transactions are properly recorded
To learn more about Reunion, please contact Kevin Haley at kevin@reunioninfra.com

The “Inflation Reduction Act of 2022” (IRA) delivered a plethora of benefits to renewable energy project developers, including billions of dollars in tax credits and newly created flexibility to transfer tax credits or capture direct pay.
But these benefits come with some strings attached, and it’s important for any clean energy project developer to clearly understand the rules before diving into new projects. These strings are divided into two groups: “carrots” and “sticks” that the federal government is using to guide developers to meet certain conditions.
Starting with the “sticks,” here is a brief overview of the eligibility rules for renewable energy Production Tax Credits (PTC) and Investment Tax Credits (ITC):

How Should Developers Think About These Rules?
The simplest way to approach the wage and apprenticeship rules is to treat them as necessary prerequisites to project development. Without following these rules, developers will only capture a 6% ITC or 0.52 cent/kWh and leave significant value on the table.
Developers who fail to meet wage and apprenticeship standards may “cure” their shortcomings by repaying shortfalls plus interest, or certain fees/penalties. If the developer was determined to have intentionally failed to meet these standards, the penalty amounts increase significantly.
Fortunately for developers, the Department of Labor already publishes wage determinations and rates, and will be adding to that list as this program takes effect. Likewise, there has been increasing interest in apprenticeship programs across the country. New programs like the Real World Academy in New Jersey and the Sustainability Hub in Illinois are springing up and the Solar Energy Industries Association (SEIA) has a number of resources to support developers.
How Do These Prerequisites Differ from Adders?
So-called “adders” are the second important part of the tax credit regime created by the IRA. Serving as the “carrot” for developers, adders are true incentives for development under certain conditions.
Here is a brief overview of the adders specific to the Production Tax Credit (PTC) and Investment Tax Credit (ITC):

**There are some specific parameters to the definitions above, which can be found here.
How Should Developers Think About These Adders?
Adders can be a valuable way to capture additional PTCs or ITCs for any given project. Importantly, however, developers should be thorough in their diligence of eligibility. Many tax equity investors won’t fund adders until full IRS guidance has been issued, and will expect to see diligence documents proving the project’s qualifications.
Some groups are already publishing helpful maps to illustrate where certain adders may be available, such as energy communities and low-income communities. Here is one example from S&P Global.
But once IRS guidance is in hand and developers can confidently assess their project locations and domestic content, the adders under the IRA can deliver even more tax equity or transfer tax credit capital to projects.
In Conclusion, Where Do We Go From Here?
The Department of Treasury and the IRS are continuing to release guidance related to the IRA. In tandem, the project developer industry is collaborating with each other and industry groups like SEIA to identify best practices and optimize for maximum development value. Over the course of 2023, expect to receive more clarity on the formal obligations under the IRA, and the informal best practices across the renewable energy industry.
Reunion Infrastructure is working with 50+ developers to source transfer tax credits for banks, insurance companies, and corporates with tax appetite in 2023 and 2024 or beyond. Whether you are a developer or taxpayer looking for credits, please reach out to get an introduction: info@reunioninfra.com
.png)