Key Takeaways

Post-election uncertainty in clean energy policy: The Republican election win has introduced significant uncertainty around the Inflation Reduction Act (IRA). While full repeal of the IRA is technically possible via budget reconciliation, bipartisan support for certain provisions, particularly in Republican-led districts, may help preserve key elements of the legislation.
Strategic importance of the IRA: In the past two years, companies have announced a total of over $300 billion in new investments in clean energy, leveraging tax credits like 45X to incentivize domestic manufacturing and renewable energy deployment. This design aligns incentives with political priorities, fostering resilience despite potential legislative challenges.
Domestic manufacturing as a success story: The IRA’s domestic content requirements have driven substantial investment in U.S.-based clean energy manufacturing. Companies are realigning supply chains to qualify for incentives, with major projects like solar manufacturing plants under development in states like Texas and New York.
Corporate demand for tax credits: Corporations are increasingly buying tax credits to reduce liabilities while supporting clean energy projects, leveraging an expected $40 billion in tax credits in 2024 (already double pre-IRA levels). This burgeoning market includes "economic players" seeking safe, low-risk returns by purchasing tax credits at a discount, bolstering demand for 45X and ITC-based transactions.
Stability of tax credit transactions: Clean energy tax credit deals remain active and show strong momentum, even amid political uncertainties. Transactions are progressing uninterrupted, with many parties safe-harboring assets through early investments and planning for potential regulatory adjustments.
Challenges in policy implementation: Even if the IRA survives wholesale repeal, the new administration could impede its rollout via executive orders or delays in regulatory guidance. For instance, critical registration portals for tax credit transfers could face disruptions, creating additional hurdles for developers and investors.
Sectoral vulnerabilities: Certain credits, such as those for green hydrogen and energy-efficient home improvements (25C), face heightened risk of repeal or adjustment due to their weaker political support. Conversely, provisions tied to domestic content and union jobs are likely to endure, reflecting bipartisan priorities.
Renewable energy’s long-term resilience: Despite near-term political turbulence, renewable energy remains a core component of the U.S. energy landscape. Corporate climate commitments, rising short term electrification needs from artificial intelligence computing, and the economic viability of renewable projects ensure that the clean energy transition will continue to gain traction.

Transcript

Erik Underwood

Thank you. We are there. Okay. Well, thank you, everybody, for joining. And good morning. Good afternoon. Thanks for taking the time with us today. My name is Eric Underwood. I'm joined today by an illustrious panel, including Shariff Barakat, Lauren Collins, Corey Lewis, and Jamie Park, to discuss what actually happened in 2023 with tax credit transfers, lessons learned, and what we expect in 2024. So this is not a 101 on what tax transferability is. I invite you to join or to see previous recordings of other panels on there. But this is IRA related tax credit transfers for clean energy, qualifying tax credits from the IRA. So we'll cover topics, basically that are relevant to monetizing clean energy tax credits. The individuals on this panel have supported a wide range of deals in the first year of transferability, which really will help inform the nearly 400 registrants that we have on this panel.

So excited to have such a wide ranging audience today, including developers, investors, financiers, corporates, and other service providers, such as legal firms and accounting firms as well. So I'm really excited to talk about what makes a deal go well and what we expect for 2024. We will hold some time at the end in the last ten minutes for Q&A. So please feel free to send through any questions that you might have during the session and in the q and a portal. And then we will also be posting a recording on this. If you're not able to attend the entirety of this session or if you're not able to attend at all, you'll be listening to this on a recording.

I do also finally want to acknowledge that we have some members of the press on today's panel. So hopefully this helps us spread the word about transferability to the wider us corporate tax audience. And with that being said, I'd like start kick off by inviting each panelist to do a brief introduction of themselves and the role of their firm, and then we'll take it off from there. So, Sharif, do you want to start?

Shariff Barakat

Sure. Thanks, Erik. Thanks for having us all on here today. Excited to speak. I'm Sharif Barrickat. I'm a tax partner with Akin Gump in Washington, DC. I'm part of the projects and energy transition group here, which is sort of a full service, everything related to renewables assets. And I joke with the IRA coming along, everything generates a tax credit now. So you have to really understand a whole lot more asset types. And transferability has really come in and changed the game in terms of what used to be just tax equity kind of is the only way to monetize in many instances. So we've been really working on the forefront trying to think through these types of transactions with a lot of the people who are on this call, actually. Right. So looking forward to the discussion. Thanks again for having me.

Lauren Collins

Thanks, Erik. Yeah, I'm Lauren Collins. I'm a tax partner at Vinson & Elkins. Have been working in the energy transition space for over a decade, but things have really been super exciting and taken off since IRA was enacted. Goodness, over a year and a half ago now. So all sorts of new asset classes, as Sharif mentions, transaction type, tax equity, transferability, debt finance, all sorts of new and exciting deals. And transferability has really been at the forefront of that. So excited to talk to you all today.

Corey Lewis

Thanks, Erik. Those of you don't know me, my name is Corey Lewis, co head of our north american tax insurance practice here at Anne. We are an insurance brokerage firm. I really lead our tax credit insurance efforts. Been with Ann for coming up on nine years. Former practicing tax attorney. Before AON, I was at PwC and the International Tax department, focusing mostly on up on real estate investing. I'm looking forward to talk about tax credit insurance on transfers.

Jaime Park

Hi, everyone. I'm Jamie Park. I'm a managing director in our Washington national tax at Deloitte. I'm in the federal tax credits and incentives Group, and I focus on all areas of energy credits and incentives. I've been with the former for about one and a half years. And prior to that, I was with the office of chief counsel at the IRS for about 16 years, working on many of these ITC and PTC work. But most recently, I was at the House Ways and Means Committee, and I was involved with many of these energy related tax provisions that were in the Build back better act but now implemented in the IRA. So it's been exciting times and there are a lot of questions and a lot of regulations and guidance coming out. So it's been super fun.

Erik Underwood

Yeah. And I think the constant trickle of guidance coming up makes things even more exciting every time we get those news. So it's good to see that. And it's great to have each of your experiences on. Thank you all. So I think to kick off, I'd like to start discussing what 2023 really looked like for everyone. First question would be a quick fire impression about the adoption of transferability. Specifically, did tax credit transferability exceed your expectations, meet your expectations, or fall short for 2023? Just give me a couple of sentences on what you thought. I'll leave it open for the panels.