(AGENPARL) – ROME mer 17 maggio 2023

This article is featured in our Q1 2023 Global Renewables Market Update, a comprehensive analysis of North American and European renewable energy markets, current PPA pricing developments, policy movement, and trends shaping the global renewable energy landscape. Click here to read and download the full report.

As a result of the IRA, opportunities via tax credits have increased. In addition to the tax credit extensions and bonus adders discussed in Edison’s Q4 2022 report, the IRA creates a new provision around tax credit transferability that reduces complexity and creates opportunity for smaller investments. Transferability allows the project owner to sell all or part of the renewable tax credits by transferring them to another taxpayer, thereby expanding the pool of potential investors. Some sellers have expressed a willingness to work with C&I buyers on tax credit participation models. The industry awaits more guidance from the IRS on tax credit transferability implementation, though some have already begun structuring these types of deals.

Tax credit transferability may be an appealing participation model for buyers who are able to provide upfront capital in the millions of dollars, but these transactions are not typically structured with RECs included, given that underlying projects will still need PPAs (generally bundled with project RECs) to provide a fixed revenue stream. This is a challenge for buyers pursuing a renewable energy transaction to reduce their Scope 2 emissions.

The IRA has also introduced more value for storage via additional tax credits; as a result, more buyers and developers are considering renewable generation and co-located storage models. Storage is also appealing to manage reliability and volatility in an increasingly volatile pricing environment.

Aligning incentives for buyers and developers has been the most significant challenge around the current solar/ storage model. Storage assets are usually deployed to align with anticipated pricing events, and buyers typically are not positioned to dictate the dispatch of the asset and must rely on the developer. Without a strong economic or contractual incentive, the buyer is exposed to significant risk when it comes to the settlement of the battery. Storage assets also generate revenue across a range of markets (electricity, capacity, and ancillary services), and often much of their revenue is incurred outside of the electricity market.

Given these dynamics, sharing of revenues in all markets should be a consideration in contract terms. While storage can provide great economic value to renewable energy buyers, the market remains undeveloped and risky. In a recent survey of developers, none had been able to execute paired solar/storage deals to date, though several were pursuing options.

To learn more about the specifics of the IRA and its provisions, explore Edison’s blog series.

The post Following the IRA, buyers are exploring tax equity and storage opportunities appeared first on Edison Energy.

Fonte/Source: https://www.edisonenergy.com/blog/following-the-ira-buyers-are-exploring-tax-equity-and-storage-opportunities/