House bill shrinks project finance market by eliminating tax credit transfers
S&P Global reports that the budget bill's proposal to phase out clean energy incentives by eliminating tax credit transfers is expected to significantly shrink the renewables project finance market, which facilitated $40 billion in such transfers in 2024.
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."
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