Solar energy is becoming increasing attractive due to the narrowing cost differential between solar and fossil fuels. This provides businesses and municipalities alike with a tremendous opportunity to become leaders in energy efficiency and environmental stewardship. Beyond long-term cost savings, solar power is part of a larger sustainability strategy that can reduce your carbon footprint in the future and contribute to financial stability. Additionally, renewable energy and new markets tax credits are making solar energy development even more economically appealing.
By combining the expertise of attorneys and practice groups who focus their work on tax equity, energy development, real estate, and government relations, McDonald Hopkins is uniquely positioned to assist clients from conception to completion with their solar projects. Our attorneys have assisted with solar projects in multiple states, including Arizona, Ohio, and Texas. With our established experience and broad network, our firm has the distinctive ability to help clients identify future opportunities for growth and secure the financing need to make your solar energy project a success.
Investment Tax Credit
The federal Investment Tax Credit (ITC) was created to encourage investment in renewable energy property. The ITC is a federal tax credit of 30 percent or 10 percent of expenditures on eligible energy systems, depending on the type of technology. Solar technology qualifies for a 30 percent credit. Renewable energy ITCs benefit a project by providing equity capital. The ITC generally offsets taxes dollar-for-dollar and is claimed in the year the solar technology is placed in service. Typically, in a solar energy project utilizing ITCs, the transaction is structured so a private investor, such as a bank or another publicly-traded company, makes an equity investment in the entity undertaking the project in order to capture the incentive provided by the investment tax credit generated by the project.
New Markets Tax Credit
The New Markets Tax Credit (NMTC) program is a federal tax incentive that can be utilized to drive down the price of solar – at or near parity with grid pricing in some locations. The NMTC program permits individual and corporate taxpayers to receive a credit against federal income taxes for making investments in qualified community development entities. Solar projects benefit from NMTCs in the form of “soft” loans and/or equity investments from private investors that receive the tax credit. The NMTC can be a critical part of the capital mix for a solar project and is available alongside the ITC.
Landfill development projects, authorized through Rule-13, offer municipalities an innovative solution for the use of capped landfills in the face of strict rules and regulations placed on the use of these lands. With only three having been constructed in the country thus far, municipalities are at a transcendent period of time in which they can set examples for future growth in the solar energy market.
- Represented a developer/owner in Texas for a 10 MW solar project.
- Represented a developer/owner in Phoenix, Arizona, for a 200 KW behind the meter solar install project on a car port.
- Represented a developer/owner in Brooklyn, Ohio, for a 4 MW solar install project on a landfill.
- Represented an owner in Tucson, Arizona, for a 2 MW behind the meter solar project.
- Represented a land owner in North Carolina for a 10 MW, 400 acre ground lease for a solar install project.
- Represented a nonprofit, private college in Ohio in structuring a pre-paid power purchase agreement and in all aspects of a 2.2 MW solar photovoltaic project.
- Represented a nonprofit, private university in Ohio in the negotiation of a power purchase agreement and site leases for a 2 MW solar project.