Maximizing speed of origination and due diligence for a $200M transfer of §45 PTCs
Case Study
§45 PTC
March 2024
How Reunion quickly matched two publicly traded companies and met the buyer’s audit-ready due diligence threshold across 100+ facilities.
Overview
In 2024, Reunion facilitated a $200M transfer of §45 production tax credits (PTCs) between two large publicly traded companies. The deal, involving credits from over 100 wind and utility-scale solar facilities spanning 10+ sites, marked a first-time transaction in federal clean energy tax credits for this Fortune 500 buyer.
Reunion addressed both the buyer's desire to minimize out-of-pocket expenses and the seller's objective to maximize cash flow by structuring terms that included quarterly arrears payments and a capped true-up mechanism to account for production variability. Audit readiness was also a key requirement. Reunion curated a dynamic data room, supported by a summary memorandum on the projects and underlying tax credits, which enabled the buyer's Big Four accounting firm to complete a comprehensive diligence review efficiently. Quarterly funding packages documenting additional diligence at each funding date rounded out an audit-ready record from original closing through each subsequent funding. This transaction laid the foundation for repeat 2025 and 2026 deals between the parties.
100+ facilities
diligenced to audit-ready standard
Repeat deal secured
in 2025 and 2026
Deal context
The deal
§45 PTC
2024
$200M
§45 Production tax credits (PTC)
Wind and utility-scale solar facilities
Deal structure
A §45 PTC transfer structured with quarterly arrears payments, capped true-up terms, and audit-ready diligence processes
The buyer
- Fortune 500 corporation
- Entering the §6418 market for the first time
- No prior experience with federal clean energy tax credit transfers
The buyer’s objectives
- Secure a single experienced counterparty capable of delivering $200M+ in credits at scale
- Prioritize PTCs that were PWA-exempt to help minimize compliance risk
- Structure payments to avoid out-of-pocket expenses beyond normal tax payment timing
- Ensure documentation was IDR-ready from day one, as the buyer was in the IRS Compliance Assurance Process (CAP)
Hands-on deal guidance
How Reunion guided the deal for the buyer, from counterparty match through deal structuring
Single counterparty
Matched the buyer with a single seller capable of delivering $200M+ in credits at scale
Experienced seller
The publicly traded seller had prior tax equity and transferability experience, reducing execution risk
PWA-exempt
Selected credits that qualified for PWA exemption, reducing compliance risk
Audit-ready documentation
Neatly packaged data room and summary memo in anticipation of IRS CAP review
Reunion structured quarterly payments in arrears aligned with estimated tax payment dates
Ensuring the buyer never went out-of-pocket beyond normal tax timing. A quarterly true-up mechanism was built in, with a mutual option to flex the credit cap up to $220M to handle production variability and mid-year rate publication.
Comprehensive deal memo
A §45 PTC transfer structured with quarterly arrears payments, capped true-up terms, and audit-ready diligence processes.
In-depth risk management
How Reunion's thorough and efficient due diligence process produced a comprehensive, audit-ready diligence package, including the following:
Tax credit qualification
Validated tax credit qualification for 100+ energy facilities across 4 Regional Transmission Organizations (RTOs) by mapping them onto recent satellite images to confirm their existence, location, and function
PTC rates & PWA requirements
Consolidated disparate files onto a single dashboard to confirm relevant Placement In Service (PIS) and Beginning Of Construction (BOC) dates, helping determine PTC credit rates and exemptions from PWA requirements
Energy generation & sale
Substantiated the generation and sale of electricity to third parties by aggregating settlement files from four RTOs that corresponded to the relevant facilities and creating a software tool to validate the amount of electricity sold
