Solutions for
Tax Credit Buyers
Reunion delivers de-risked portfolios of clean energy tax credits for corporate tax and treasury teams.
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Reduce Taxes and Increase Cash Availability
Corporations can "do well and do good" by redirecting federal tax payments to fund clean energy projects. Tax credits are typically purchased at a 4% - 12% discount while the tax savings amount remains non-taxable.
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The Reunion Advantage
Ongoing Administration
Tax Credit Insurance
Due Diligence
Reduced Risk
Legal Documents
Minimize Risk
Easily Manage Projects
Seamless Transaction Closing
Compare Projects and Options
Get a Simplified View of IRA Regulations and Complexities
Reunion Guides Buyers Through Every Step of the Transaction Process
Receive diversified portfolio of credits
Generate attractive return on capital
Use tax liability more efficiently
Contribute to ESG goals
Sample Transaction
Pay $45M in Cash for Tax Credits
Save $50M
On Tax
Enjoy $5M in Profits
Benefits
Our Unique Value Proposition
Reunion's seasoned team has developed a curated developer community to ensure availability of the highest quality projects and a derisked transaction process.
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FAQs
Frequently Asked Questions
Whether you are experienced with tax credits or buying them for the first time, we have the expertise to help. Here are some common questions we get from buyers.
Should I buy an investment tax credit (ITC) or a production tax credit (PTC)?
Well, it depends! Buyers who want to maximize tax savings typically opt for ITCs, while buyers who want a simpler transaction typically opt for PTCs.
In 2023, ITCs above $10M in transaction size with strong risk mitigation in place were generally trading for $0.91 to $0.93, while PTCs were trading for $0.94 to $0.96. ITCs trade at a wider discount because the due diligence is more involved and ITCs are subject to recapture by the IRS if the underlying asset is abandoned, foreclosed, or placed out of service during the 5-year recapture window.
Is there a deadline for purchasing credits for the current tax year?
You can buy a credit for the current year, up until the date that you file taxes for the current year. For example, a calendar year filer seeking to buy credits for 2024 has until April 15 of 2025 (or October 15, if they file an extension) to buy credits for the 2024 tax year.
What is the timing of when I need to pay cash for the credits?
Tax credits are generally purchased after they are generated. Buyers may commit to purchasing a credit in advance, but typically will only pay cash after the credit has been generated.
Timing of payments is typically a topic of negotiation between buyer and seller. The buyer prefers to pay as late as possible, while the seller would prefer to receive cash as soon as possible. If a seller agrees to delay receipt of payment, it may result in a lower discount to the buyer to compensate for the cost of capital.
The IRS regulation 6418 clearly states that a taxpayer can offset estimated tax payments with tax credits they purchase or “intend to purchase.” This has opened the door for structures in which buyers can achieve the full benefit of the credit before cash outlay. Many buyers seek to structure payments that coincide or occur after their quarterly estimated tax payment dates. For an in-depth discussion of the timing of credits, please read our article here.
What kind of due diligence is required?
For a §45 PTC, buyers should validate that the project qualifies for the tax credit. Due diligence includes confirming that electricity was generated and sold to a third party while also confirming the placed-in-service date of the project.
For a §48 ITC, buyers should validate that the project qualifies for the tax credit and that the risks of tax credit recapture are mitigated. Due diligence includes confirming the cost basis of the project for purposes of calculating the tax credit, typically through a cost segregation analysis by a reputable third-party accounting firm. Buyers should also substantiate any step-up in cost basis, and confirm the placed in service date of the project.
For projects that began construction after January 29, 2023 buyers should validate compliance with prevailing wage and apprenticeship (PWA) requirements. Buyers should also validate that projects qualify for any bonus credit adders such as energy community, domestic content, or the LMI adder (awarded to projects that serve low-income communities that meet certain requirements).
Reunion Accelerates Investment Into Clean Energy
Reunion’s team has been at the forefront of clean energy financing for the last twenty years. We help CFOs and corporate tax teams purchase clean energy tax credits through a detailed and comprehensive transaction process.
