Churchill

A field of Solar Panels, solar ITC

SOLAR ITC’S – SOME RISK AND REWARD BASICS FOR COMPANIES SEEKING ‘TURNKEY’ ESG INVESTMENTS

BY DREW GOLDMAN, VP OF INVESTMENTS Every year, many sophisticated corporations divert over $20 billion of federal tax payments into projects in renewable energy, affordable housing, and historic preservation, in exchange for tax breaks and investment benefits. Some perceive a significant level of complication in these programs, and therefore delay taking a closer look. The very word ‘investment’ moves many people outside their comfort zones. As a manager of funds delivering Renewable Energy Tax Credits (Sec. 48 of the Internal Revenue Code), Foss & Company is in the business of making it easy to take advantage of this high-impact federal tax incentive. ITC (investment tax credit) Funds provide a well-defined system for dealing with project and developer selection, project structuring, negotiation and closing, as well as potential tax benefit delivery including: Determining project eligibility and focusing on any hurdles to placing site(s) into service Structuring the transaction to address developer and investor needs Underwriting the developer, underlying power purchase contract and pro forma operations Valuing and appropriately pricing tax credits and other projected benefits Delivering Tax documents and financial reporting for annual federal filings In terms of physical asset protection, potential losses at a solar farm typically to fall into two categories: ‘Acts of God’– fire, floods, earthquakes, or storms that damage the array or interrupting operations; and ‘Acts of Man’ – such as terrorism, a vehicle or plane crash, negligent maintenance, or faulty equipment. These risks can be insured against potential losses. One risk typically not covered in conventional policies is fraud. Foss & Company conducts due diligence and background checks on each developer and its principals prior to closing any project. The lender and the long-term power buyer (typically a utility, municipality, or large corporation) conduct their own independent evaluations as well. Recapture Risk – The full value of…

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Foss & Company George Barry

FOSS & COMPANY SPOTLIGHT: GEORGE BARRY, PRESIDENT

Foss & Company is comprised of a group of experienced professionals, representing the best in class within their respective fields. In a new blog series, we will be highlighting different Foss & Company team members to shine a light on the diverse and dedicated people that help make us who we are. Starting off this series with the president of Foss & Company – George Barry.   How did you get started in this industry? Mostly by luck. After law school I knew following the huge footprints of my father in a career as a litigator was not for me. My wife had joined an Oil & Gas syndication firm a few years earlier and  I had gotten to know the founder well. He offered me a position in the firm as a sales representative, much to the chagrin of my wife. This was in 1985 and our primary clients were high net worth individuals seeking to manage their tax liabilities in an environment where the top marginal rate was 70%. In less than a year the most significant changes to the tax code in 30 years occurred with the passage of the 1986 Tax Act. This completely blew up our former business model but it did, most fortunately, create the Low Income Tax Credit. We began marketing the LIHTC credits to individuals but soon realized this was better suited for institutional investors. We expanded our presence in the tax credit space to include solar (thermal, initially), landfill gas, refined coal, historic tax credits and more recently carbon capture production tax credits.   What interested you about this industry? The tax credit industry is full of challenges. I enjoy getting up every day and taking on those challenges. I like that we can offer solutions to our partners, helping them convert a…

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