In Our Client's Shoes: How STRIVE by STX Takes a 360-Degree View On Transferable Tax Credits
The IRA allows clean energy tax credits to be sold, helping developers raise funds and buyers cut taxes while supporting renewables. STRIVE by STX stress tested these federal incentives with their own transaction to examine the transaction from all sides. Explore the benefits, possible pitfalls, and best practices in our new case study, In Our Client’s Shoes: How STRIVE by STX takes a 360-degree view on transferrable tax credits.
The IRA allows clean energy tax credits to be sold, helping developers raise funds and buyers cut taxes while supporting renewables. STRIVE by STX stress tested these federal incentives with their own transaction to examine the transaction from all sides. Explore the benefits, possible pitfalls, and best practices in our new case study, In Our Client’s Shoes: How STRIVE by STX takes a 360-degree view on transferrable tax credits.
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Key Takeaways
The passage of the Inflation Reduction Act (IRA) intends to inject hundreds of billions of dollars into the U.S. economy, prioritizing the acceleration of the clean energy transition and improving energy security.
Now, renewable energy developers can sell or “transfer” their tax credits to unrelated third parties. Due to their limited tax liability, project developers are often willing to sell these credits at a favorable rate to improve cash flow and liquidity.
For corporate buyers, acquiring these tax credits offers a dual advantage:
- Reduces their tax liability, enhancing cash flow and profitability.
- Enables them to support investments into US clean energy projects that might not have been otherwise possible.
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