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What Is Solar Tax Equity Financing? | Rob Freeman

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Solar tax equity refers to pairing a solar project that qualifies for incentives, but can't use them, with an investor who has tax liability.

Footnotes The amount of the investment as a percentage of the total cost of the project is often affected by the amount of tax incentives available. The solar investment tax credit recently dropped from 30% to 26%. This may also reduce the percentage of tax equity investment as a percentage of the whole project. A 26% federal tax credit for the ITC may translate to a tax equity investment closer to 34.5%, as opposed to 40%. Government tax incentives, such as the investment tax credit and/or the production tax credit and bonus credits included in the Inflation Reduction Act are subject to…

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