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SPOTLIGHT SERIES: ANDREW MURO

Foss & Company is comprised of a group of experienced tax credit professionals, representing a depth of knowledge within their respective fields. In this blog series, we highlight different Foss & Company team members to shine a light on the diverse and dedicated people that help make us who we are. As the Vice President of Renewable Energy Portfolio Management, Andrew is in charge of all aspects of investment performance, working with sponsors on project compliance and tax credit investors on fund management. Prior to joining Foss & Company, he created a solar investment vehicle and managed its day-to-day operations. For 12 years prior to that he worked with top-tier solar or renewable energy companies, either financing assets or developing premier asset and portfolio management talent and processes globally. He has overseen some of the largest solar and wind farms in North America, as well as solar sites in Chile, Italy, Spain, England, and Canada. His education credentials include an MBA from ESADE in Barcelona, and a BA from UC Santa Barbara. To learn more about Andrew, read our latest Spotlight blog series installment: How did you get started in the tax credit investing industry?    In 2006, while working on Wall Street doing CleanTech sell side equity research, I came across an opportunity to develop a financing platform for a residential solar company in San Luis Obispo (SLO), CA. I packed up my Prius and drove from Manhattan to SLO, excited for the new opportunity to help a growing company focused on solar. We had some success developing and implementing home equity loans for solar and the team sold the first SunRun PPA deal, which was effectively a tax equity investment. From there I joined a structured finance desk with a solar developer raising tax equity in 2008. I haven’t…

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Capture the Carbon, Capture the Message!

By: Dawn Lima, Vice President of Renewable Energy & Sustainable Technology, Foss & Company   I recently attended the Carbon Capture, Utilization and Sequestration (CCUS) Summit in League City, TX, and the Carbon Capture Coalition’s Annual Meeting in Denver, CO. These events were very successful as well as insightful and I left feeling energized and motivated. It’s always enjoyable to be surrounded by like-minded professionals while making many new connections. I wanted to share some key takeaways from both events. Capture the CO2: CCUS Summit I was very impressed with the active participation from stakeholders across the CCUS industry. There is incredible excitement around CCUS right now, fueled in part by the passing of the Inflation Reduction Act (IRA) in 2022, but mainly due to a motivation to decarbonize our energy sector and achieve climate goals. During the CCUS Summit, we had participants join all the way from Canada, Asia, Europe and South America. The US’ carrot versus stick approach to incentivizing investments through tax credits has certainly captured the attention of other nations and companies. This is evident as we have seen an increase in investment in US-based projects to capitalize on the US tax credit incentives. What was clear during this event is that innovation and collaboration is critical to reaching our climate and net-zero goals. What Are My Thoughts? As we sat down with industry leaders, during our discussions there were some interesting questions that had come up, include: Is the CCUS industry innovating equally in both important areas? Does the 45Q tax credit incentivize both sequestration and utilization equally? Are we – as a CCUS industry – working on CCU projects as well as CCS projects? The short answer? No. In its current form, the 45Q tax credit does not incentivize CCU equally compared to enhanced oil…

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Treasury/IRS Propose New Rules for Implementing Section 48 Energy Tax Credits

By: Bryen Alperin, Partner and Managing Director of Renewable Energy & Sustainable Technologies, Foss & Company   The U.S. Treasury Department and IRS have recently announced the release of proposed regulations (REG-132569-23) for publication in the Federal Register. These regulations are set to amend the existing rules under section 48, incorporating modifications from the Inflation Reduction Act of 2022 (IRA), previous legislative changes, and various administrative guidelines. The Notice of Proposed Rulemaking (NPRM) extends over 127 pages and aims to provide both clarifications and updates concerning the energy tax credit. Initial Foss Takeaways: Key Points for Investors Uncertainty for Biogas Equipment: In a surprising outcome, the proposed rules indicate that “gas upgrading equipment necessary to concentrate the gas into the appropriate mixture for injection into a pipeline through removal of other gases such as carbon dioxide, nitrogen, or oxygen is not included in qualified biogas property”. However, it emphasizes the eligibility of costs associated with essential components of biogas projects, such as equipment for cleaning and conditioning the gas. This has caused confusion and uncertainty in the RNG industry, as many projects feature equipment that both cleans and concentrates the gas. The implication of the proposed rules is that investors will need to do a detailed review of the process flow diagrams and determine which costs are associated with equipment which cleans or conditions gas versus equipment that concentrates gas. Depending on the determination, large portions of existing RNG projects may not qualify for the ITCs they thought they would. The industry will be lobbying to have this definition changed, or further clarified. New “Placed in Service” Criteria: The NPRM proposes a new definition of “placed in service” for Section 48, replacing long-relied-on Section 46 regulations. The definition is as expected and states that projects generating tax credits are considered…

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Investing in a Sustainable Future: Uniting Tax Equity, RECs and Corporate Savings

Did you know the key to a sustainable future lies within Renewable Energy Credits (RECs), corporate savings and tax equity investments? The dynamic synergy between these three showcase how corporations can strategically leverage tax equity to not only address their tax liabilities but also advance their commitment to sustainability.   What are Renewable Energy Credits?  With the federal government taking strong action on climate change, corporations are analyzing their carbon footprint and realizing that investing in Renewable Energy Credit (RECs) agreements and tax equity transactions can lead to being more environmentally responsible while helping improve their bottom line. Now, not all renewable energy sources come strictly from energy systems like solar panels or wind turbines. RECs are created as long as one megawatt-hour (MWh) of electricity is generated from a renewable energy source and delivered to an electric grid. Once it’s generated, corporate customers are able to purchase RECs, therefore allowing the use of renewable energy without installing renewable energy systems.  How do Tax Equity Investments Tie In?   Tax equity investments help fund viable renewable energy projects by enticing investors with a combination of tax savings and cash returns. As for developers, it provides a way to get new projects off the ground. Tax credits are government subsidies for projects like renewable energy, but many developers lack the tax liability to fully use them. That’s where tax credit investments come in. Companies with large tax liabilities can invest and receive tax credits, depreciation benefits and cash flows. RECs bolster the renewable energy market and are a cost-effective, environmentally friendly and decentralized method of carbon reduction.   What Role Do RECs Play in the Tax Equity Market?  RECs and REC markets play a key role in driving new renewable energy deployment and projects by guaranteeing an income stream for new…

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Debunking the Myths About Transferable Tax Credits

Repost of the original article in the Novogradac Journal of Tax Credits, which can be found here. As the renewable energy market continues to grow, the popularity of transferable tax credits as a way to fund projects and reduce corporate tax liabilities is on the rise. Following the passage of the Inflation Reduction Act, provisions enabling the transfer of tax credits have become hot topics for both developers and investors. In this article, we’ll discuss several common misconceptions regarding transferable tax credit transactions. Transferable Tax Credits Overview Transferable tax credits are a valuable financial instrument that allows businesses to reduce their tax liabilities by investing in projects that generate economic, social or environmental benefits. These tax credits can be sold or transferred between taxpayers, enabling companies with little or no tax liability to monetize the credits and create a new revenue stream. As attractive as this financial tool may seem, it’s essential to understand the associated risks. Myth #1: Transferable Tax Credit Buyers Have No Risk When speaking to project developers or prospective investors, we often hear transferable tax credits compared to state certificated tax credits which have almost no risk associated with them. Unfortunately, there are some risks associated with transferable tax credit transactions and it is important for investors to understand those risks. The risks associated vary across the different types of tax credits eligible for transferability. For example, clean energy investment tax credits (ITCs) are subject to recapture risk for five years following the project being placed in service. Carbon sequestration tax credits are subject to a three-year recapture period and the triggering events for recapture are quite different. Clean energy production tax credits (PTCs) are not subject to recapture, but do face volume risks which could lead to under delivery of tax credits in some years.…

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