An overview by Leo Berwick, Taxand Global Member, USA
Dorian Hunt from Leo Berwick, Taxand Global Member, USA has published a guide examining how much Investment Tax Credit (ITC) renewable energy developers can expect to generate with their projects in the USA.
In the guide, he suggests that renewable energy developers should be aware that while Section 48 of the tax code is key for calculating Investment Tax Credits (ITCs), Section 49 imposes limitations on ITCs in certain ownership structures, particularly where nonrecourse financing is involved. This section is similar to the at-risk rules in Section 465, which limit tax benefits based on the taxpayer’s financial risk. Developers should carefully evaluate how project funding and ownership structures could affect their ITCs, especially in light of evolving monetisation strategies like tax equity partnerships and credit sales.
You can read the full guide in further detail here.