The Inflation Reduction Act (IRA) provides $369 billion in funding for clean energy and climate funding. Before the IRA, clean energy tax credits were not refundable and many renewable energy project developers and operators could not use the full value of the credits because they did not have enough taxable income. To drive clean energy project development and efficient utilization of new and expanded clean energy tax credits, the IRA makes significant changes to how these credits can be monetized by allowing taxpayers to elect to receive a direct cash payment from the government in lieu of the tax credit or elect to transfer the tax credits to another taxpayer in exchange for cash.
In an article titled, "FAQs on New Clean Energy Direct Pay and Transferability in the Inflation Reduction Act," authored by Elinor Ramey, Lisa Zarlenga, and Nick Sutter for Bloomberg Tax Management Real Estate Journal, they write about these new monetization methods for clean energy tax credits contained in the IRA.
The full article can be read in Bloomberg Law Real Estate Journal (Subscription required).
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