STRATEGY
In an era of government incentives for renewable energy investment, you can pay taxes with cash, or you can pay taxes with tax benefits.
Tax benefits are cheaper.
Tax-advantaged renewable energy investment strategy
Harness the Energy Transition.
As the US government incentivizes renewable energy investment through billions in tax benefits, we believe powerful currents are building for those with the knowledge and experience to navigated them.
FAIRTIDE’S EXPERIENCE
- Goldman Sachs Research: Carbonomics: The third American energy revolution (August 2023)
Investing in
The Solar Century
Federal tax incentives for solar reflect the critical importance of American investment in the dominant energy source of the 21st century.
Today, solar is the largest source of new power generation in the US, a trend that we believe will only accelerate as solar technology continues to improve.
While the inflation-adjusted cost of coal and oil has remained steady, solar unit economics are rapidly improving, driving what The Economist calls “an exponential growth in solar power that will change the world.”
A Strategy Used by
Institutional Investors
Tax equity is a $40B market in the U.S., led by Fortune 500 companies that reduce their effective tax rates by using depreciation deductions and tax credits from renewable energy projects they own.
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Source: Marathon Capital Research
Source: Annual 10K reports (includes tax credits and benefits, where reported together, from all sources)
Source: ACORE, The Risk Profile of Renewable Energy Tax Equity Investments (December 2023)
SCALE AND SUSTAINABILITY
A Steady Course
for Public Policy
Bipartisan support made the solar tax credit permanent in 2015. The Inflation Reduction Act of 2022 enhanced its value for at least the next decade.
Understanding Tax Credits and Depreciation
The core components of renewable energy tax equity strategy are depreciation deductions and tax credits. These benefits offer attractive and timely value to investors by reducing their cash tax liabilities.
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Source: The US Internal Revenue Code 2024
Source: The US Internal Revenue Code 2024
An Attractive
Asset Class
Residential solar is a massive, $25B market1 with significant diversification—the average project is $40k—making it an ideal asset class for harnessing tax benefits.
- “Renewable Energy Outlook” Bloomberg New Energy Finance, 1H2024