Reunion's Market Monitor Q2 2025 Report

This is a snapshot of Q2 2025 data. For a real time look at transaction data, access the full dashboard here.

In June, Reunion released Market Monitor, a comprehensive view of transferable tax credit pricing, deal terms, and market dynamics. Based on over 300 transactions and $25B of deal volume, Market Monitor represents a 360-degree view of the clean energy tax credit market. You can watch our release webinar.

Alongside the platform, we are also publishing a quarterly analysis to bring key trends and observations to life.

Key trends

1. In the first half of 2025, pricing has softened for 2025 credits relative to last-minute 2024 credits
2. Seasonality of tax credit pricing has persisted into 2025
3. Pricing dispersion reflects deal- and counterparty-specific nuances
4. Premium on Investment Grade Tax Credit Sellers amounts to 1 to 2 cents more per credit
5. Increased standardization among key commercial terms
6. Buyers of all stripes are in the market
7. Nearly 20% of 2024 vintage credits closed in early 2025, driven by fiscal-year filers
8. Most Section 48 ITC transactions now include at least one bonus adder
9. Domestic content remains limited for Section 45 PTCs
10. A growing share of credits, 62% of 2025 ITCs, require PWA compliance

Pricing

Pricing for 2025 credits, relative to 2024 credits, has softened

Pricing for 2024 vintage credits generally trended up and remained elevated through Q1 and Q2 of 2025, reflecting a large number of buyers chasing a relatively small number of opportunities (especially for larger Section 48 ITCs). Conversely, 2025 vintage credits saw some softening in price in early 2025.

Seasonality of tax credit pricing has persisted into 2025

The market exhibits annual seasonality driven by supply-demand imbalances. A relatively small share of buyers were ready to purchase credits earlier in the year without knowing their tax liability; this was exacerbated in 2025 due to early-year uncertainty on how tax laws would change as a result of the reconciliation bill (now known as the OBBBA). In general, buyers willing to enter the market earlier in the year may find more deals to choose from and more advantageous terms and pricing.

Pricing dispersion reflects deal- and counterparty-specific nuances

Median pricing doesn't tell the whole story. Reunion's data shows pricing dispersion, where factors such as delayed payment timing or indemnities from investment-grade entities can lead to higher prices. Section 48 ITCs tend to have greater dispersion due to a broader mix of technologies and counterparties, while Section 45 PTCs trade in narrower bands.

The Premium on Investment Grade Tax Credit Sellers amounts to 1 to 2 cents more per credit

A selection of corporate buyers, many of whom tend to be larger, require an investment-grade counterparty. This translates into higher pricing for tax credits from investment-grade sellers, with  tax credits trading for 1 to 2 cents more per credit compared to similar projects that might carry tax credit insurance.

With a finite supply of credits from investment grade sellers. Essentially, these credits are "priced to perfection" due to their scarcity and the perceived lower risk associated with the seller.

Commercial terms

Increased standardization among key commercial terms

Reunion continues to see standardization around key commercial terms — in particular, the buyer fee reimbursement (often $50K-$150K) and exclusivity period (commonly 30-60 days). We believe this is emblematic of a maturing market with increasing efficiency in deal closing.

Markets

Buyers of all stripes are in the market

The transferable tax credit market demonstrates wide adoption across various buyer industries and supports a diverse range of deal sizes, from a concentration of $20 to $50M transactions, to a notable volume of $250 million+ deals.

Nearly 20% of 2024 vintage credits closed in early 2025

A significant portion of 2024 vintage credits (nearly 20%) and their associated term sheets closed in early 2025, largely driven by fiscal year-end buyers. This sustained demand, even for prior-year credits, reinforces the importance to buyers of entering the market early.

Credit values

Most Section 48 ITC transactions now include at least one bonus adder

When weighed by dollar value, the average credit value for 2025 Section 48 ITCs is 38.1%. At nearly 40%, the increasing average credit percentage for ITCs implies that most opportunities include at least one bonus credit adder — most commonly energy community, followed by domestic content.

Domestic content remains limited for Section 45 PTCs

Only 2.9% of 2025 Section 45 PTCs — when weighted by dollar value — are claiming the domestic content bonus credit.

Although the elective safe harbor meaningfully increased domestic content adoption for Section 48 ITCs, we have not observed the same flow-through to Section 45 PTCs. This largely stems from “legacy” PTCs that were placed in service before the IRA.

PWA compliance

A growing share of credits, 62% of 2025 ITCs, require PWA compliance

PWA compliance is becoming increasingly commonplace for 2025 Section 48 ITCs. However, 25% of 2025 ITCs — Sections 48 and 48E — are exempt from prevailing wage and apprenticeship requirements because of the 1MW exemption. The overwhelming majority of exempt projects are rooftop solar, whether residential (”resi”) or commercial and industrial (”C&I”).

29% of 2025 Section 45 PTCs are PWA exempt — although these credits tend to trade at an “IG-like” premium and clear the market quickly

Approximately 30% of 2025 PTCs by dollar volume are exempt from PWA requirements per the beginning of construction exemption — that is, the projects began construction before January 29, 2023.

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In two recent Canary Media stories, Reunion CEO Andy Moon offers a clear-eyed view of the mounting risks facing clean energy developers and investors.

In “Wind and solar developers face a year of hard calls with new GOP law”, Moon notes that the recent push to limit safe harbor provisions marks a “significant departure” from industry expectations. With Treasury guidance now in flux, he notes that “developers are scrambling” to understand how projects will qualify — and predicts a coming freeze: “Greenfield development is going to freeze after [safe harbor expires] until the market adjusts.”

In “Anti-China rules make GOP megabill even worse for clean energy”, Moon highlights growing alarm over FEOC guidance, which could block billions in credits for projects using Chinese-linked materials. He cautions that “the industry has not yet fully absorbed the potential impact,” and flags the long IRS challenge window and severe penalties as further chilling effects.

Together, Moon’s comments point to a new era of uncertainty.

Reunion’s breadth of experience includes working with both new and seasoned tax credit market participants. Since the ability to transfer tax credits was only enacted through the Inflation Reduction Act in 2022, some buyers are still getting introduced to the advantages of transferable tax credits as it is written in the Internal Revenue Code §6418 (the Code). Therefore, it is essential for buyers to be aware of the negotiable terms in the transaction, as no two tax credit transfers are the same. Each party (and the underlying asset) involved in the transaction may require bespoke terms and conditions to make the deal close, as is exemplified in this case study of a $200m PTC transfer that met the “audit-ready” diligence requirements of the buyer. 

Below are 10 terms that Reunion helps buyers consider when negotiating a tax credit transfer agreement (TCTA). These are not ordered by importance since each buyer’s priorities are particular to them, however, each of the following should be considered when negotiating a transaction:

Payment Terms

The payment terms are primarily composed of the purchase price and payment timing. 

• Purchase Price: The purchase price is calculated as a dollar value for every $1.00 tax credit transferred – for instance, $0.935. Buyers and sellers negotiate this term based on the economics of the transaction and key risk factors, such as whether the counterparty is investment grade, what kinds of tax credits are involved, and the total expected volume of the transaction. Read more about the buyer’s perspective for these transactions and how to set the appropriate price. 
• Payment Timing: When a transaction closes can significantly influence the negotiated purchase price. Transactions with earlier payments, such as a simultaneous sign and close, are often favored by the seller due to the time value of money. Therefore, the seller may be more open to a lower purchase price. Sometimes the buyer is inelastic on this term and requires that transfer payments align with their quarterly estimated tax payment dates to minimize out-of-pocket spend.

Transaction Cost Reimbursement

Most buyers opt to include a transaction cost reimbursement provision in their tax credit bids. It is common for buyers to ask sellers to reimburse some or all of the transaction costs they incur. This request is often driven by accounting considerations, as most buyers do not want to incur an “above the line” expense to generate a “below the line” tax benefit.

Buyers should first identify the expenses they will incur, such as legal fees for outside counsel or costs for accounting firms providing third-party diligence support. For transfers with subsequent funding milestones (e.g. multiple closing dates), buyers should consider the timing of expenses as well as the amount needed to support subsequent fundings.Buyers must weigh what other impacts this provision could have on the transaction. A reimbursement provision will ultimately decrease the amount of proceeds to the seller, so it could impact the overall economics of the transaction (e.g., smaller tax credit transfers may not support large transaction cost reimbursements) or make the bid less competitive when a seller considers their net proceeds.

Exclusivity

Most of Reunion’s tax credit transfers move from term sheet execution to TCTA signing in under 45 calendar days. During the exclusivity period, both parties are generally incurring costs related to definitive documentation and due diligence. To protect their investment of time, effort, and money, buyers typically request an exclusive right to purchase the credits. 

Buyers can negotiate for a fixed exclusivity period when drafting the term sheet and will typically request an extension if the exclusivity period has expired and all parties are working in good faith to close the transaction. Reunion has seen exclusivity periods range from zero to 60 days following execution of the term sheet. A period beyond 60 days is not typical and could signal to the seller that the buyer is not able to close the transaction in a timely manner.

Indemnity Scope

In every tax credit transfer agreement, a buyer will require the seller to indemnify them for the disallowance or recapture of tax credits. Indemnities can be structured in two ways:

• Breach-Based Indemnity: Indemnification for a loss is triggered by a specific breach of a representation, warranty, or covenant.
• No-Fault Indemnity: Indemnification for a loss occurs regardless of whether a contractual breach has happened. 

Most indemnities will cover any tax gross-up, interest, penalties, and fees incurred in connection with the loss. For ITC transactions, as further described in the Section 48 ITC Due Diligence Guide, buyers negotiate for indemnity in the case of a recapture event.

Indemnity Seller Cap

Sellers may negotiate for a cap to the amount recoverable through the indemnity clause. Stipulated limitations of liability are often required by larger, institutional sellers. If the seller makes this request, buyers should analyze whether the indemnity limit is sufficient enough to recoup any losses incurred on an after-tax basis (including anticipated damages such as interest, penalties, taxes, and additional expenses needed to enforce the claim). 

Reunion has supported transactions with no caps, as well as transactions with caps expressed as a percentage of the face value of the credits or the purchase price of the credits. The former is more common.

IRS Contest Process

In the case of an IRS contest, Reunion sees most transactions include language in the TCTA that dictates which party will be responsible for working through, and leading, the process with the IRS and what rights each party will hold. Buyers should consider how they want this to be managed while reviewing the TCTA. In most cases, the party that is directly involved in the contest with the IRS controls the process at that party’s expense and notifies the other party as needed. 

Buyers and sellers may also be required to adhere to any requirements under the insurance policy (where applicable) to preserve and pursue a claim to minimize the amount of tax credits lost. 

Change in Law

Due to the uncertain political climate, most buyers have asked for provisions to be included in the TCTA that protect them from any future changes in the Code, or regulations that could impact their ability to utilize any purchased tax credits. A recent focus for buyers has been on language that specifically indemnifies the buyer against changes in law that are retroactive in effect (e.g., tax credits for projects placed in service on or before a retroactive change in law). Buyers may also seek the ability to terminate an agreement if there are changes in law that have a material adverse effect between signing and closing.

Credit Enhancements

When the seller is not investment grade or there are other unique risks in the transaction, the buyer can negotiate for further credit support. 

• Guarantor: The primary option is a guarantee from the seller's parent company or another affiliated party. Securing protection from an investment-grade guarantor may result in a higher net credit price if the seller does not have to obtain tax credit insurance.‍
• Tax Credit Insurance: If the seller cannot provide a suitable guarantor, tax credit insurance is an alternative. The policy limit of liability is typically based on a negotiated percentage of the tax credits' face value. However, all policies have specific exclusions to coverage, including material misrepresentations, inaccuracies or omissions, breaches of transaction documents, recapture that is caused by the seller, fraudulent or criminal conduct, any position taken in tax returns that is materially inconsistent with the covered tax position, and change in law. Additional exclusions may also apply depending on specific circumstances relating to the underwriting of the tax credit.

Step-up Limit

For investment tax credit transactions, project developers commonly sell a project into a partnership where the purchase price is “stepped up” to a fair market value (FMV) that exceeds the developer’s total capital expenditure. These FMVs should be supported by underlying documentation and assessed by a third-party appraiser. Some buyers and insurers have requested a limit to the step-up percentage as a higher step-up may have additional risk in the event of an IRS contest if the step-up is partially or fully disallowed. Recent transactions have allowed for at least a 20% step-up when supported by the facts and circumstances of the applicable transaction.

Diligence Requirements

After the buyer and seller have executed a term sheet, they work alongside their respective counsel and any other third-party assistance, to mitigate concerns around the transaction and underlying tax credits. Most transactions require a standard set of diligence items, which typically extends beyond the minimum documentation requirements under Treas. Reg. Section 1.6418-2(b)(5)(iv). Diligence may include, but is not limited to, third party reports, legal memoranda, and original project documents. 

Standard diligence items include:

• Third Party Consultant Reports: Examples include a cost segregation report, fair market value appraisal, independent engineer report, 80/20 analysis, and tax memo, depending on the type of tax credit.
• Legal Memoranda: In some instances, a third-party legal analysis may be required to address specific risks in a transaction, including qualification as eligible technology or qualification for credit adders.
• Original Project Documents: Sellers should anticipate requests to substantiate the tax credits and analyze any potential for recapture. For §48 ITCs and §45 PTCs, this may include executed site control and interconnection documents, as well as offtake, EPC, asset management, and O&M agreements. Photographs or satellite imagery is often used in diligence as well. In instances where a portfolio of distributed generation assets is involved, buyers can request a sampling size that is reasonable given the terms of the transaction. For §45X AMPCs, the documentation involves proof of sales contracts and underlying costs for the eligible technology. 

Buyers should consider which diligence items are non-negotiable given the details of the transaction and parties involved. We have seen in recent transactions, buyers and sellers collaborating on mandatory diligence requests and finding a path to resolution. On items that are not imperative, flexibility from buyers has helped transactions be executed within the exclusivity period. 

More details can be found in the Transferable Tax Credit Handbook.

Summary

Reunion has seen many recent transactions accommodate the pain points of both the buyer and the seller - especially when backed with well-reasoned requirements. Ultimately, both parties benefit from these transactions moving forward de-risked and well positioned in the market. 

If you are interested in buying credits, thinking through which of these terms is important to you will help get ahead of negotiations in your tax credit transfer deal. Then as an informed and prepared buyer, you can move quickly and take advantage of quality tax credits as they become available in the market.

Andy Moon, CEO of Reunion, offers S&P Global his perspective on the proposed Republican-led budget bill. He states that while there's a current window for activity as buyers proceed with eligible projects started in 2025, the window will close after the bill's 2028/2029 expiration dates. He noted that Reunion will need to diversify its offerings to serve its extensive network of 300 developers and 150 buyers with adapted financing solutions. With power demand exponentially increasing, alongside bipartisan support for the tax credits and their benefits for Republican-led states, "in some ways maybe we were too comfortable that things would work themselves out," Moon said. The article highlights $40 billion of tax credits were monetized in 2024 through the transfer market. If the cutting of technology-neutral tax credits by 2029 alongside the 2028 phaseout of 45X manufacturing credits is enacted, then "participation by third-party corporations in clean energy project finance would effectively end."

Read the full article here.

Andy Moon, CEO of Reunion, commented on the proposed repeal of transferability for clean energy tax credits.

He stated that despite the House bill significantly shortening the availability window for these credits, market participants are confident that tax credit transfers will be respected in 2025. Moon believes this assurance, particularly assuaging fears of retroactive repeal, will likely accelerate credit transfers through the end of the year. He expects "to see a wave of buyers looking for tax credits in the second half of the year, which will drive prices up similar to what we saw in 2024." Moon also noted that for projects meeting safe harbor requirements, transfers could still occur for the next couple of years, even if the House bill passes as is.

Read the full article here.

Andy Moon, CEO of Reunion, provided comments to Tax Notes on the rapid materialization and evolution of the IRA credit transfer market.  He noted that 2024 began with few buyers, but by midyear, comfort with the process grew, leading to a surge in transactions where credits would sell within days or weeks by year-end.  Moon observed that while purchasers are committing to production tax credits for multiple years, there's reluctance for long-term commitments to ITCs expected in 2026 and beyond, with only a few large buyers engaging in extensive negotiations for such deals.  He mentioned that buyers who acted early in 2024 generally secured lower prices, and while the learning curve of 2024 won't repeat, early movers in 2025 might still benefit by committing despite legislative uncertainty (see Andy’s breakdown of The One, Big, Beautiful Bill).  Moon also highlighted that purchase agreements are now heavily negotiating change-in-law provisions, and the time to close deals has significantly reduced, indicating a maturing market.

Read the full article here.