Energy Finance Report

Odds on an Solar Investment Tax Credit (ITC) Extension Seemingly Rising by the Minute

Posted by Jeffrey Karp on 12/16/15 7:22 PM

Despite “grinchy” recent predictions from some, the solar industry looks set to receive some holiday cheer with the odds on an investment tax credit (ITC) extension seemingly rising by the minute. Many credit the ITC as one of the predominant factors behind the surge of solar in the U.S. Despite some pushback from House Republicans last week, the lower chamber is set to vote on an omnibus appropriations bill by the end of this week, which includes a five-year extension of the credit.

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Topics: Structured Transactions & Tax, Solar Energy, Renewable Energy, Oil & Gas, ITC, Oil Export Ban, Investment Tax Credit, Congress

Discussing the Investment Tax Credit- Panel at MDV-SEIA’s Solar Focus

Posted by Jeffrey Karp on 11/23/15 10:37 AM

I moderated a panel at MDV-SEIA’s Solar Focus event to discuss what is arguably the hottest, most impactful topic in the solar space today – the Investment Tax Credit (ITC), and specifically, its scheduled step-down at the end of calendar year 2016.

The ITC is a controversial topic. Arguably, and while this is probably not a popular opinion among readers of this page, the 30% ITC may have run its (very successful!) course. Hardware and install prices have plummeted in recent years. Traditional capital markets are being accessed through bond offerings and YieldCos. Even stodgy holdout utilities in the southeast are becoming more active in the solar space. More solar has been built in recent quarters than any other generation type.

And yet . . . solar remains a small part of the overall generation mix, and many states, including those with great insolation numbers, remain untapped markets. Some have estimated that up to one hundred thousand jobs might be in jeopardy if the step-down occurs. An ongoing 30% ITC would make it easier for many states to comply with their potential Clean Power Plan (CPP) obligations. The U.S. is arguably at the cusp of a real shift in its energy mix that might be delayed, if not derailed, if the credit is not extended.

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Topics: Energy Policy, Structured Transactions & Tax, Energy Finance, Legislation, Distributed Energy, YieldCo, Solar Energy

Are Seesaw Share Prices Impacting YieldCo Buying Power?

Posted by Jeffrey Karp on 11/12/15 11:57 AM

YieldCos have been hammered lately, both in the stock market (though things have recently been picking up) and in the press. The reasons are myriad with theories addressing MLP values, rising interest rates, negative public statements from management teams, a slowing Chinese economy, lower oil prices, capital constraints and YieldCo disassociation from parents entities all being floated as potential reasons for recent losses in shareholder value.

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Topics: Energy Policy, M&A, Structured Transactions & Tax, Power Generation, Energy Finance, Distributed Energy, YieldCo, Solar Energy, Renewable Energy

Mid-Atlantic: Distributed Energy Opportunities

Posted by Jeffrey Karp on 11/3/15 11:58 AM

The Mid-Atlantic region (Maryland, Delaware, Virginia and the District of Columbia) is currently at the forefront of discussions regarding the next generation of distributed electricity markets. Notable developments pushing the region into the spotlight recently include M&A activity, creativity on the part of public service commissions, local innovations in PACE finance, and increasing flexibility on the part of local utilities.

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Topics: Water Energy Nexus, Utilities, Water, Carbon Emissions, Energy Security, Thermal Generation, Energy Policy, M&A, Structured Transactions & Tax, Energy Storage, Energy Efficiency, Power Generation, Microgrid, Energy Finance, Distributed Energy, Energy Management, Solar Energy, Renewable Energy, Wind, Oil & Gas

Avoiding Distressed Sale Situations in Solar

Posted by Jeffrey Karp on 11/3/15 7:26 AM

The word on the street is that completion risk heading into the scheduled, dreaded investment tax credit (ITC) step down is already becoming an issue for solar developers. In short, there is a general fear on the part of market participants that solar projects currently in development won’t meet the IRS’s qualifications for being placed in service before the end of 2016, when the ITC is scheduled to decline from 30% to 10%. This would make many projects in the current environment economically unviable.

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Topics: Energy Policy, Structured Transactions & Tax, Energy Finance, Distributed Energy, Solar Energy, Renewable Energy

REV Conference Recap: Opportunities for Distributed Generation in New York

Posted by Jeffrey Karp on 10/21/15 11:38 AM

The Sullivan & Worcester LLP Energy Finance team recently hosted an event on New York’s Reforming the Energy Vision (REV) initiative. In particular, the panel participants, including former New York Public Service Commission Commissioner Bob Curry, Mike Pantelogianis of Investec, Sarah Carson Zemanick of Cornell University and Jay Worenklein of US Grid Company, focused on how deals will get done under the new framework.

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Topics: Carbon Emissions, NY REV, Structured Transactions & Tax, Energy Efficiency, Power Generation, Energy Finance, Distributed Energy, Energy Management, Renewable Energy

Can the Clean Power Plan Achieve Its Carbon Emission Reduction Goal Through Increased Renewable Energy Development?

Posted by Jeffrey Karp on 9/22/15 10:41 AM

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Topics: Utilities, Carbon Emissions, Energy Policy, Structured Transactions & Tax, Energy Efficiency, Power Generation, Microgrid, Energy Finance, Legislation, Distributed Energy, Energy Management, Renewable Energy

Property Owners Increasingly Embracing Energy Efficiency Technologies

Posted by Merrill Kramer on 9/2/15 6:36 AM

Co-authors Josh Sturtevant and Morgan Gerard

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Topics: Structured Transactions & Tax, Energy Efficiency, Power Generation, Energy Finance, Distributed Energy, Energy Management, Solar Energy, Renewable Energy

Offshore Wind Has Come to the U.S.; EPCs Can Help It Gain Momentum

Posted by Jeffrey Karp on 8/27/15 10:08 AM

Co-authors Jim Wrathall, Van Hilderbrand and Morgan Gerard

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Topics: Utilities, Energy Policy, Structured Transactions & Tax, Power Generation, Energy Finance, Legislation, Wind

Are YieldCos Insulated from the Looming ITC Stepdown?

Posted by Jeffrey Karp on 8/7/15 6:15 AM

Co-author Morgan Gerard

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Topics: Structured Transactions & Tax, Distributed Energy, YieldCo, Renewable Energy

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The Energy Finance Report analyzes developments in energy finance as well as provides updates and perspectives on market trends and policies.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

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