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In order for the IRA to realize all of the benefits from the subsidies it allocated to renewable energy and advanced manufacturing, the legislation needed to revise how tax credits were going to work. The traditional form of tax equity financing wasn't going to be enough, so the IRA introduced something called tax credit transferability. This new process has opened up the tax credit market to a whole new batch of investors, able to invest in even smaller projects, and at rates that are encouragingly beneficial to the clean energy economy.

Paul outlines how this new structure works and the impact that it is already having on clean energy projects.

For more research:

"Monetizing Energy Tax Credits: A Guide to Transferability and Tax Equity Transactions" - Cherry Bekaert

"Understanding Direct Pay and Transferability for Tax Credits in the Inflation Reduction Act" - Cap 20

"Transferable Tax Credit Market Intelligence Report, 2023" - Crux

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