Tax Equity
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 Associate Vice President of Investments for Renewable Energy and Sustainable Technologies, Ms. Hua manages the closing and diligence process for renewable energy and sustainability funds and participates in the screening of potential new investments. Prior to joining Foss & Company, Ms. Hua worked in Business Development and led utility-scale solar and battery originations. Her experience includes corporate development and risk management roles at The Williams Companies. Ms. Hua holds an MBA from The University of Tulsa and a BBA from The University of Oklahoma. She is based out of our Denver office. To learn more about Jennifer, read our latest Spotlight blog series installment: How did you get started in the tax credit investing industry? I was first introduced to tax credit investing during my tenure at The Williams Companies, where I held various roles over seven years. During my time in Corporate Development, I built dynamic models for capital projects covering solar, battery and natural gas. Williams was not a corporate taxpayer at the time, requiring us to explore alternative routes to monetize Investment Tax Credits. This experience provided me with key knowledge in tax credit structures. The knowledge and expertise I gained from this exercise has been invaluable in my contributions at Foss & Company. When did you join Foss & Company and what interested you about the company? I joined Foss & Company in August of 2023 and was drawn to the organization’s rapid-paced environment and talented professionals. The tax credit industry is ever evolving,…
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Strategic Moves: Navigating Transferability-Flips for Institutional Investors In the ever-evolving realm of institutional investment, savvy investors are turning their attention to innovative strategies to enhance portfolio returns. As the transferability market gains momentum, institutional investors are strategically leveraging Transferability Flip Transactions, or “t-flips,” to unlock latent value in their tax equity investments. In this landscape, partnering with a seasoned fund sponsor, such as Foss & Company, becomes not just a choice but a strategic imperative. The Institutional Advantage in the Transferability Market: Institutional investors are well-positioned to capitalize on the increasing activity in the transferability market. As regulatory landscapes shift and market dynamics evolve, institutions can leverage their scale and expertise to navigate the complexities of t-flips for optimal portfolio performance. Investors interested in making equity investments may enhance their after-tax returns by utilizing the t-flip structure to invest in renewable energy and sustainable technology projects. Investors interested in buying tax credits on a transferable basis can may find that a t-flip structure offers risk mitigation benefits when compared to a “direct purchase” of tax credits. Understanding T-Flips: A Transferability Flip Transaction is similar to the Partnership Flip structure that the industry has used for billions of dollars of transactions, but instead of having the tax credits allocated based on ownership in the project, the tax credits are transferred to a third-party buyer. There is still a tax equity partnership at the project level which can monetize the depreciation benefits of the project and establish a “step up” in the tax credit eligible cost basis to a fair market value. Working with Experts: Institutional investors and tax credit buyers seeking to capitalize on the transferability market’s potential are wise to align with a reputable fund sponsor like Foss & Company. Foss & Company, with its proven track record, not only…
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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 National Sales Director, he leads our capital raising efforts, working with institutional investors and large corporations to direct investment capital into high-impact, tax credit-generating projects in renewable energy and real estate. Prior to joining Foss & Company, Peter spent over twenty years in asset management and wealth management. His experience includes leadership roles focused on business development at Bank of America, Wells Fargo and Bank of Montreal. Peter’s other experiences include commercial banking, alternative investments and commercial real estate. He graduated from the University of Dayton with a Bachelor of Arts degree in Communications. To learn more about Peter, read our latest Spotlight blog series installment: How did you get started in the tax credit investing industry? Tax credit investing has always represented an extraordinary opportunity. My first introduction to the tax credit investing industry has been with Foss & Company, however I’ve always been interested in the space and have several friends that have been in the business for some time. When did you join Foss & Company and what interested you about the company? I joined Foss & Company in November of this year as the National Sales Director. Foss & Company’s entrepreneur spirit and drive to do what’s best for the client is what interested me about the company. There is a “can do” attitude here at Foss that you don’t see across other organizations, and they are know for putting their clients first. What originally interested you about this industry? I’ve worked in asset…
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By: Dawn Lima, Vice President of Renewable Energy & Sustainable Technologies, Foss & Company Shades of Gray, Blue, Green – Why do we need a color wheel to describe hydrogen and what do the colors mean? If you have been following the headlines and reading recent articles about the future of energy, you’ve likely read about hydrogen and the many colors used to describe it. Green, blue, gray, yellow, pink, etc. Why does a naturally colorless gas have so many colors? Hydrogen is a very promising energy source in a decarbonized future as it does not emit carbon dioxide (CO2) when burned. Hydrogen energy could have many uses, particularly to decarbonize heavy vehicle transportation and construction. What these Colors Mean So, why are there so many colors to describe hydrogen? The different colors of hydrogen refer to how the hydrogen is made: mainly the source of the hydrogen molecule and the source of the power used to generate the hydrogen. The most common colors include gray, blue and green. Gray Hydrogen: About 80% of hydrogen produced is currently gray. To make gray hydrogen, natural gas is burnt in a process called steam methane reform (SMR) and carbon dioxide is released into the atmosphere, not captured and sequestered. The power to generate the hydrogen is typically the local grid (not necessarily renewable energy) so the source mix will depend on the location of the plant and now decarbonized the grid in the region is. Blue Hydrogen: Around 1% of hydrogen produced. Blue hydrogen is slightly less environmentally harmful than gray. Blue is produced in the same way as gray, but the carbon dioxide is captured and sequestered, not released into the atmosphere. The power to generate the hydrogen is typically the local grid (not necessarily renewable energy). Green Hydrogen: Green…
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Preserving the Past: Unpacking Historic Tax Credits Historic preservation goes beyond the architectural beauty of a building. It is an important way to transmit the understandings of the past to future generations and preservation of the history helps tell these stories. The federal government realized the importance of these historic sites and implemented the Federal Historic Preservation Tax Incentives program that will encourage private sector investment in the rehabilitation and re-use of historic buildings. At a state-level, 37 states have adopted the state historic tax credit program and are transforming underutilized historic buildings to create more inclusive and resilient communities. What are Historic Tax Credits? Historic Tax Credits (HTC) are a federal tax credit program that provides investors with a 20% credit against the costs of rehabilitating eligible historic structures. This program was established in 1978 and has facilitated the rehabilitation of over 42,000 certified historic buildings. Administered through the National Park Service, Internal Revenue Service (IRS) and State Historic Preservation Offices, it has created over thousands of jobs and turned out to be the nation’s most successful and cost-effective community revitalization program. At the state-level, Historic Tax Credits complement the federal program by providing additional incentives, leading to even greater financial benefit for property owners. 70% of states have adopted some form of historic tax credit incentive to support building reuse and the preservation policy. What Does This Mean for Property Owners, Developers and Investors? Let’s take a look at HTCs on a federal level. Property owners can claim tax credits for up to 20% of qualified rehab expenses and this can offset the cost of rehabilitation to make projects financially viable for owners. As for developers, HTCs will incentivize developers to renovate, restore, and reconstruct the historic buildings. No other tax credit provides as much incentive to preserve…
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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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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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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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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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Foss & Company is comprised of a group of experienced professionals, representing the best in class 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. Michael joined Foss & Company in April 2023. As Vice President of Investments, he works with institutional investors and large corporations to direct capital that is set aside for federal and state taxes into high-impact, tax credit-generating projects with a focus on renewable energy and carbon capture. Prior to joining Foss & Company, Michael spent 10 years developing an all-electric, zero emission freight transportation system. During this time, he expanded the company into three new markets, sourced over a billion dollars of debt and equity capital, and garnered offtake agreements with Fortune 500 companies throughout the United States. Michael graduated from Texas A&M University with a B.S. in Aerospace Engineering and M.Eng. in Industrial and Systems Engineering. Get to know Michael in the latest Spotlight Series Blog: How did you get started in the tax credit investing industry? Originally, I came from an entrepreneurial background in supply chain and logistics. As an engineer, I spent years developing a new freight transportation system and I then started working to commercialize the technology, so I saw firsthand how much effort went into getting large infrastructure projects financed. Since then, I wanted to move more directly into finance. I was excited at the opportunity to join Foss & Company in a role that allows me to help bring meaningful projects to completion while adding value to the corporations investing in them. When did you join Foss & Company and what interested you about the company? I joined Foss & Company in April 2023 in…
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As the world races towards a sustainable future, the need for clean and renewable energy sources becomes increasingly vital. In this journey, biogas, bioenergy and renewable natural gas (RNG) are emerging as frontrunners, offering a promising solution to our energy demands. However, the path to widespread adoption requires support from various stakeholders, including tax equity investors. In this blog, we delve into the crucial role of tax equity in accelerating the energy transition and driving the advancement of biofuels. A Vision for the Future As we approach 2030, the energy transition takes center stage. Tax equity and tax credits have become instrumental in driving this transition by incentivizing investments in sustainable energy projects such as solar, carbon capture, electric vehicles (EV) and more. The involvement of tax equity investors is vital in providing financial support to biofuel developers, propelling the growth of biogas, bioenergy, and RNG projects. By channeling their investments strategically, tax equity investors play a pivotal role in shaping a greener and more sustainable future. Unveiling the Potential Biogas, biofuels, bioenergy, and RNG represent the pinnacle of sustainable energy solutions. Biogas is produced from organic waste and serves as a clean source of fuel. Biofuels are derived from renewable organic materials, providing a greener alternative to traditional fossil fuels. These fuels can be seamlessly integrated into existing infrastructure and engine technology, making them readily accessible for widespread adoption. In the quest for a sustainable future, these bio-based energy sources hold tremendous promise. Not only are biofuels compatible with existing infrastructure and engine technology, but they also offer near-to-long-term solutions that have a critical role to play. Tax equity investors facilitate the development of biofuel projects by providing the necessary funding and expertise. Their involvement enables biofuel developers to realize their visions, thereby accelerating the transition towards a sustainable…
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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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Foss & Company is comprised of a group of experienced tax credit professionals, representing a great 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 Vice President of Renewable Energy and Sustainable Technologies, Dawn Lima manages all aspects of the transaction lifecycle for both solar and carbon capture utilization and sequestration (CCUS) investments, including the identification and development of new CCUS opportunities for Foss & Company. Ms. Lima has over two decades of experience in full cycle of oil & gas energy development, spanning operations, business development and acquisitions & divestitures. To learn more about Dawn, read out latest Spotlight blog series installment: How did you get involved in the tax credit industry? By chance or even fate! After over two decades working in the Oil & Gas industry developing fossil fuel energy I was approached by Foss & Company for a position on the Carbon Capture, Utilization & Sequestration (CCUS) team. I was interested in working on renewable energy projects and Foss offered a unique opportunity. I knew little about the tax credit industry at the time but was very intrigued by tax equity investments; corporations can convert a tax liability to an attractive investment that also has a positive social impact! Tax credits and tax equity investing rings many bells: Investment versus liability, reduces the corporate tax rate, ESG project and positive social impact! What originally interested you about carbon capture and the renewable energy/sustainability industry? I have over 20 years of experience in Oil & Gas and had the opportunity to work both domestically and internationally on a variety of upstream development projects. I chose to pivot and work…
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As the world increasingly recognizes the urgent need to transition to clean and renewable energy sources, governments around the globe are implementing various incentives to boost investment in the renewable energy sector. In the United States, two prominent incentives are the Production Tax Credit (PTC) and the Investment Tax Credit (ITC). Under the Inflation Reduction Act (IRA), these tax credits have been enhanced to further encourage the development and utilization of renewable energy projects. By gaining an understanding of how the IRA has enhanced its influence on renewable energy investment, investors can make more informed decisions when it comes to allocating their resources. Production Tax Credit The PTC has long been a crucial policy tool in promoting renewable energy in the United States. It provides a tax credit to project owners based on the electricity production from qualified renewable energy facilities. Historically, the PTC has primarily supported wind energy projects, but through the IRA, its scope has expanded to include other renewable sources such as biomass, geothermal, hydropower, and marine energy. Investment Tax Credit The ITC is another critical component of the U.S. government’s renewable energy policy framework. Unlike the PTC, which focuses on electricity generation, the ITC provides tax credits based on the capital investment in qualifying renewable energy projects. It applies to a wide range of technologies, including solar, wind, geothermal, fuel cells, and combined heat and power systems. Comparing the PTC and ITC under the IRA Under the IRA, the PTC and ITC are invaluable tools for accelerating renewable energy investment in the United States. With enhanced eligibility periods, increased credit rates, and broader technology coverage, the PTC incentivizes renewable energy production, particularly in the wind sector. The extended ITC eligibility and inclusion of energy storage systems under the IRA fosters the integration of renewable energy sources…
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Foss & Company is comprised of a group of experienced professionals, representing a great 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. With 16 years of experience in financial services, Adam Rutherford specializes in directing investment capital towards impactful projects like renewable energy, carbon capture, and real estate, in collaboration with institutional investors and corporations. His previous roles include serving as a Financial Education Consultant and Investment Analyst at J.P. Morgan. At Empower, he demonstrated excellence in institutional sales for Fortune 500 companies and skillfully managed corporate and nonprofit relationships while overseeing Advisory Services solutions. Adam holds a B.A. in Business Administration with a focus on Finance and Real Estate from the University of Missouri – Columbia, and he obtained an MBA from Columbia University in New York. Learn more about Adam in our latest Spotlight Series: How did you get started in the tax credit investing industry? I was in the financial services industry at the same firm (through a merger) for 16 years before I got a call about an opportunity with Foss & Company, I loved what I was doing and the people I worked with. Only something as interesting and impactful as what we do at Foss & Company could have prompted a change. I was hooked on the value proposition and the clear positive impact of the investments we take part in. When did you join Foss & Company and what interested you about the company? I joined in 2022 to support clients in the Northwest (AK, WA, OR, ID, MT, WY and the Northern half of CA). The dynamic at Foss & Company is very…
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By Bryen Alperin, Managing Director This blog is the second in a series that will explore the opportunities in the transferability of renewable tax credits for investing in renewable energy and reducing tax liability. The Inflation Reduction Act, signed into law on August 16, 2022, has created new opportunities to invest in a sustainable future. There are many options, but one of the more promising is new transfer provisions which allow for the transfer of renewable energy tax credits between taxpayers. With these new transfer provisions, a taxpayer can purchase a tax credit generated from an eligible project, for example, at $0.90 per $1 of tax credit and then apply the credit to reduce required tax payments to the IRS by the full $1. We know enough about transferability to be certain that this added feature in the Internal Revenue Code will allow for a meaningful new avenue to access tax credits from renewable energy projects, and we expect these changes to expand the population of taxpayers that participate in the renewable tax credit market. The industry anxiously awaits guidance from the IRS on the intricacies of transferability, and when that guidance will be delivered is still uncertain. However, we do have solid visibility into what participants can expect, including that: Taxpayers can elect to transfer all or a portion of their tax credits to a non-related transferee. Payment for credits must be in cash. The tax credit amount will not be included in taxable income, nor deductible. There are no caps or phase outs (unlike direct pay). Election must be made no later than the due date (including extensions) for the respective tax return, and is irrevocable. Transferees cannot re-transfer the credits. If the tax credit is generated by a partnership, the partnership needs to make the election. Transferability…
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Due to the risks posed by unsustainable practices, Environmental, Social, and Governance (ESG) analysis has gained increasing importance in the corporate world. This approach considers key stakeholders outside of shareholders during investment analysis, which helps investors protect against risks, capitalize on green opportunities, and attract ESG-conscious investors. By doing so, ESG analysis promotes stakeholder capitalism. In recent years, ESG-aligned investments have accelerated and outperformed the market. Environmental and social factors are among the top risks identified by the World Economic Forum, and double materiality makes ESG-aligned corporations best positioned for a low-carbon future. Governments can incentivize private investment in green industries through taxes and tax credits, which are an increasingly popular option as part of ESG strategies. Tax credit investments provide a market and revenue stream for renewable energy producing organizations, enabling them to align themselves with a sustainable, low-carbon economy and reduce their transition and liability risks and cost of capital while enhancing their ESG-credentials. Currently, ESG measurement and reporting space lacks a universal framework and consistency in terminology, data, and practices. The Taskforce on Climate-related Financial Disclosures (TCFD) framework and the EU Action Plan on Sustainable Finance aim to provide clarity and guidance on ESG and its incorporation into investment decisions, while the US Securities and Exchange Commission’s proposed disclosure rule will mandate public companies to report on their ESG impacts and seek assurance on that data from a third party. Companies that report and progress on ESG impacts and progress towards ESG goals are viewed as remaining competitive, while financial markets predict long-term benefits for returns. ESG-related disclosures are important as they provide stakeholders with the necessary data to analyze the material impacts of an organization. This enables companies to make smarter tax credit investment decisions and report the investments afterwards, meeting stakeholder expectations and enhancing their…
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Foss & Company 2022 project, Radical Hotel Many companies have long overlooked tax equity investing as part of their tax strategy for different reasons. But this past year has presented new, unique opportunities in the tax equity market for both developers and investors. The Inflation Reduction Act (IRA) has provided more incentives than ever in US history for tax credit investments and facing the current challenge of inflation and increasing interest rates, tax equity may be essential to push projects forward. 2022 proved to be a big year for Foss & Company as well. In June, Foss announced that in addition to the over $8 billion in tax equity the company has deployed since its inception, we have over $1 billion in tax credits currently under management. Among other milestones, the Foss & Company team has continued to grow. We welcomed 14 new team members who have helped grow our capital markets, renewable energy, marketing and real estate teams. We are also pleased to share that in August of 2022, Foss & Company featured North Carolina project, Capitola Mill, won the Gertrude S. Carraway Award for demonstrating a commitment to extraordinary leadership, research, philanthropy, promotion, and/ or significance in preservation. We could not be more thrilled with our successes in 2022, and we could not have done it without our dedicated team, developer partners and investor clients. Vision 2045: A Look Towards the Future In 2022, Foss & Company had the unique opportunity to be featured in the Vision 2045 campaign. This campaign supported the United Nations and its objectives for the institution’s 100- year anniversary in 2045 and aimed to inspire businesses and people to take collective action to ensure a better future for all. As part of this multi-faceted campaign, Foss & Company produced a short, documentary-style video that highlighted…
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Generally Accepted Accounting Principles (GAAP) are a set of guidelines and rules that companies use to prepare their financial statements. These principles are established by the Financial Accounting Standards Board (FASB) and provide a consistent framework for companies to report their financial information to investors, analysts, and regulators. Renewable Energy Tax Credits (RETCs) require specific accounting principles to which companies must adhere to accurately reflect the economic benefits of these credits in their financial statements. One of the key principles is the deferral method, which allows companies to recognize the tax credits over a period of time rather than all at once. The deferral method is used to reflect the economic benefits of the tax credits in a more accurate and realistic manner. When tax credits are recognized all at once, it can lead to overstating the value of the credits and can result in a mismatch between the tax benefits and the associated costs. By spreading the recognition of the tax credits over a period of time, companies can align the tax benefits with the associated costs, providing a more accurate representation of the economic benefits of the credits. To use the deferral method, companies must determine the period over which the tax credits will be recognized. This is typically the same period as the project’s useful life, which is the period over which the project is expected to generate economic benefits. Companies must also determine the amount of tax credits that will be recognized in each period. This is typically done by using an estimate of the expected tax credits for the period and adjusting it as necessary based on actual results. In addition to the deferral method, companies must also follow other GAAP principles when accounting for RETCs. These include properly classifying the credits as either a…
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Foss & Company is comprised of a group of experienced professionals, representing the best in class 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. Drew Goldman, Vice President of Investments for Foss & Company, spent 18 years in financial services and held roles including equity syndication, strategic M&A, global investment banking, corporate lending, and commercial real estate before joining Foss & Company in 2019. Drew has an MBA from Emory University’s Goizueta Business School and earned his BBA from The University of Texas at Austin. Get to know Drew in the latest Spotlight Series blog: How did you get started in the tax credit investing industry? After working in the corporate finance and investment banking industries, I moved “back home” to Atlanta in 2005 and found myself in charge of business development for an apartment management company; a large portion of the third-party units were in the Low-Income Housing sector, so I learned a lot about tax credits by absorption. With 2008 – and the “Great Recession” an opportunity to raise capital for a large LIHTC syndicator presented itself. I then transitioned into tax equity. Since then, I have migrated from Housing into Renewable Energy and Historic Preservation. When did you join Foss & Company and what interested you about the company? I joined Foss in January 2019 with a growing interest in financing Renewable Energy and other Sustainability-focused initiatives. Foss has a highly entrepreneurial culture, and a flexible approach to our evolving marketplace. What do you find important or interesting about tax credits? I have been in financial services since the 1990s – tax credit equity is well-proven for mobilizing private sector capital into…
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In November, Foss & Company Managing Director Bryen Alperin and Associate Vice President of Renewable Energy Investment Operations Annie Amrhein travelled to Sharm-El-Sheikh, Egypt to join business leaders from around the world in sharing best-practices that promote the United Nation’s Sustainable Development Goals (SDGs) within their organizations. We have included their reflections from the conference below: Climate change is a global problem. What insights did you gain through the lens of a global assembly of leaders and experts that differ from US-focused events? One major reflection I took away from this type of global assembly is how climate change, associated impacts, and overall management of these impacts, has no bounds. There were so many different industry players present from product manufacturing to electric vehicles to real estate management to professional sports to public officials. This varied representation was significant and showcased quite clearly how climate change issues are not contained nor confined to one sector. I think where there is variation is how companies and industry players are choosing to enact sustainable solutions. Although the underlying goal may be the same, due to the nature of a company’s core mission, revenue stream, position within the market, etc., these differing factors influence how decision-makers not only develop but ultimately implement within their given business structures. Throughout discussions, what were some general consensuses between global leaders and experts concerning sustainability? What were some of the biggest differences in perspectives? The conference showed evidence that the “sustainability and environmental initiatives are bad for business” argument no longer holds merit. In fact, I think the opposite is now the case of if a business representative is unable to speak to what the company is taking to decarbonize infrastructure, minimize waste, promote sustainable measures throughout its employee base, then it may result in negative business…
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Launches Innovative Funding Platform for Solar Developers September 11, 2017, Las Vegas Nevada (Solar Power International trade show), San Francisco California: Foss & Company announces the launch of TaxEquity.com, a web platform designed to optimize the tax equity investment process for renewable energy developers. Arranging financing for commercial and industrial solar projects is notoriously challenging, and getting to a term sheet with a qualified tax equity investor that can close is arguably the most difficult part of assembling the capital stack. There are only a handful of highly active tax equity investors, and the whole process can often seem cumbersome and confusing due to high variability in each project, intricacies of tax code, deal structure and interests of debt providers. Because of this, a considerable amount of due diligence must be conducted on each project, driving up costs and resulting in a slow evaluation process. These factors set a relatively high barrier to entry for developers; most professional tax equity investors won’t work with developers with projects or portfolios less than 3 megawatts in size. Foss Renewable Energy Partners Managing Director Alex Tiller said “The goal with TaxEquity.com is to allow more capital to flow to more renewable energy projects. We can achieve this by standardizing the way we interface with developers and evaluate their projects. Additionally, we will work with debt providers to generate standardized and preapproved documents that a developer can choose to use, which leads to a streamlined evaluation process. Combining the two previous steps with algorithm driven analyses, we hope to cut the time to terms sheet down to hours, rather than days.” Tiller added that in the near future, they would like to find a way to fund projects as small as 100 kilowatts in size. Renewable energy project developers can evaluate the system on…
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